Econometrics Commons^™

Investment Choice Architecture In Trust Games: When “All-In” Is Not Enough, Joaquin Gómez-Miñambres, Eric Schniter, Timothy W. Shields

ESI Working Papers

While many economic interactions feature “All-or-Nothing” options nudging investors towards going “all-in”, such designs may unintentionally affect reciprocity. We manipulate the investor’s action space in two versions of the “trust game”. In one version investors can invest either “all” their endowment or “nothing”. In the other version, they can invest any amount of the endowment. Consistent with our intentions-based model, we show that "all-or-nothing” designs coax more investment but limit investors’ demonstrability of intended trust. As a result, “all-in” investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness.

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 …

Non-Separable Models With High-Dimensional Data, Liangjun Su, T Ura, Yc Zhang

Research Collection School Of Economics

This paper studies non-separable models with a continuous treatment when the dimension of the control variables is high and potentially larger than the effective sample size. We propose a three-step estimation procedure to estimate the average, quantile, and marginal treatment effects. In the first stage we estimate the conditional mean, distribution, and density objects by penalized local least squares, penalized local maximum likelihood estimation, and numerical differentiation, respectively, where control variables are selected via a localized method of L-1-penalization at each value of the continuous treatment. In the second stage we estimate the average and marginal distribution of the potential …

How Do Interest Rates Affect Market Capitalization Growth Rates In The Us?, Philip Carolin

Undergraduate Economic Review

This paper investigates how interest rates affect the market capitalization growth rate of individual companies in the US. The research will distinguish itself from previous literature as it analyzes company and macroeconomic data after the 2008 recession. This is particularly interesting as interest rates have been historically low in this time period. Previous research suggests that since the Great Recession the effects of interest rate changes have decreased. On the contrary I will argue that the effects of interest rates still appear to be significant and substantial when explaining the market capitalization growth rate.

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 …

The Effect Of Inflation Targeting Policies On Dollarization-A Cross-Country Analysis, Dweepobotee Brahma

The Hilltop Review

This paper attempts to review the experiences of various dollarized economies from the adoption of an explicit inflation-targeting framework for domestic monetary policy. Dollarization is the phenomenon where agents in a country choose to use a foreign currency instead of their domestic currency. This often occurs in response to episodes of high inflation rate in the domestic economy. Central Banks of these countries often respond by adopting an inflation-targeting regime. This paper attempts to evaluate the effectiveness of such a policy by conducting a cross-country comparison. A panel dataset from 14 dollarized economies from 2001-2015, is used to compare between …

Rhode Island Current Conditions Index -- September 2019, Leonard Lardaro

The Rhode Island Current Conditions Index

No abstract provided.

An Interview Question That Brought About Some Thoughts, Zhengxiao Wu

Research Collection School Of Economics

We tackle the question posed by journalist Mehdi Hassan – on how many Chinese lives could be lost or would have to be lost to justify a single percentage of economic growth. We considered a utility maximization problem where the utility function is defined to be the sum of the life expectancy at birth for all Chinese nationals.

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 …

Estimation And Inference Of Fractional Continuous-Time Model With Discrete-Sampled Data, Xiaohu Wang, Weilin Xiao, Jun Yu

Research Collection School Of Economics

This paper proposes a two-stage method for estimating parameters in a para-metric fractional continuous-time model based on discrete-sampled observations. In the first stage, the Hurst parameter is estimated based on the ratio of two second-order differences of observations from different time scales. In the second stage, the other parameters are estimated by the method of moments. All estimators have closed-form expressions and are easy to obtain. A large sample theory of the pro-posed estimators is derived under either the in-fill asymptotic scheme or the double asymptotic scheme. Extensive simulations show that the proposed theory performs well in finite samples. Two …

Singapore As A Sustainable City: Past, Present And The Future, Tomoki Fujii, Rohan Ray

Research Collection School Of Economics

This paper outlines Singapore’s major sustainability challenges and its policy response in the areas of land use, transportation, waste management, water, and energy. We review the current and past Concept Plans from the perspective of sustainable land use and provide an overview of transportation policy in Singapore. We also examine Singapore’s policies to manage increasing wastes and review the four tap water management plan. Finally, we look at various initiatives by the government for sustainable use of energy. While Singapore has been successful in many ways in transforming itself into one of the most prosperous and sustainable cities in the …

Forecasting Realized Volatility Using A Nonnegative Semiparametric Model, Anders Eriksson, Daniel P. A. Preve, Jun Yu

Research Collection School Of Economics

This paper introduces a parsimonious and yet flexible semiparametric model to forecast financial volatility. The new model extends a related linear nonnegative autoregressive model previously used in the volatility literature by way of a power transformation. It is semiparametric in the sense that the distributional and functional form of its error component is partially unspecified. The statistical properties of the model are discussed and a novel estimation method is proposed. Simulation studies validate the new method and suggest that it works reasonably well in finite samples. The out-of-sample forecasting performance of the proposed model is evaluated against a number of …

Essays In Empirical Economics, Agustin Indaco

Dissertations, Theses, and Capstone Projects

This dissertation consists of two chapters that utilize distinct econometric methods and novel datasets.

In the first chapter, “From Twitter to GDP: Estimating Economic Activity From Social Media”, I collect all geo-located image tweets shared on Twitter in 2012-2013 to study whether the volume of tweets is a valid proxy for estimating current GDP in USD at the country level. My preferred model explains 94 percent of the cross-country variation and the residuals from the model are negatively correlated to a data quality index, indicating that my estimates of GDP are more accurate for countries with more reliable GDP data. …

Effects Of Innovations In Health Care Provision And Financing, Hoda Nouri Khajavi

Dissertations, Theses, and Capstone Projects

This dissertation consists of four chapters that study the impacts of innovations in health care provision and financing. The relentless rise in US health care costs has led the Centers for Medicare and Medicaid Services to launch various pilot programs to create financial incentives for health care providers, suppliers, and local communities to improve the efficiency of the health care system. The fist chapter of this manuscript reviews the main pilot programs implemented and/or funded by the Centers for Medicare and Medicaid Services since the 111th United States Congress passed the Patient Protection and Affordable Care Act, also known as …

Essays On Applied Machine Learning For Implied Volatility Interpolation And Artificial Counterfactuals, Pablo A. Crespo

Dissertations, Theses, and Capstone Projects

This dissertation consists of two chapters.

Chapter 1: Volatility estimates under the risk neutral density have become a much revisited topic of interest in recent years. The density proves itself a powerful tool for sentiment analysis, since its moments provide insights about expectations in price trends. A standard procedure for its extraction utilizes artificial volatility predictions to form a dense enough grid for approximating a complete probability distribution. This paper proposes two common machine learning technique variations to produce implied volatility predictions when data is very scarce. First, a model using regularization through a variation of a generalized LASSO path …

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, …

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 …

Strong Consistency Of Spectral Clustering For Stochastic Block Models, Liangjun Su, Wuyi Wang, Yichong Zhang

Research Collection School Of Economics

In this paper we prove the strong consistency of several methods based on the spectral clustering techniques that are widely used to study the community detection problem in stochastic block models (SBMs). We show that under some weak conditions on the minimal degree, the number of communities, and the eigenvalues of the probability block matrix, the K-means algorithm applied to the eigenvectors of the graph Laplacian associated with its first few largest eigenvalues can classify all individuals into the true community uniformly correctly almost surely. Extensions to both regularized spectral clustering and degree-corrected SBMs are also considered. We illustrate the …

The Effect Of Citi Bike Introduction On Injury Rates In New York City, Masakazu Hiruma

Theses and Dissertations

This paper tests the hypothesis that the introduction of Citi Bike influences bicycle injuries by observing the gradual expansion of the bike share system in NYC. Data is analyzed from 2012-2018 New York Police Department (NYPD) Motor Vehicle Collisions and Citi Bike Station Feeds (NYC Open Data).

Rhode Island Current Conditions Index -- August 2019, Leonard Lardaro

The Rhode Island Current Conditions Index

No abstract provided.