Economic Theory Commons^™

Neoclassical Supply And Demand, Experiments, And The Classical Theory Of Price Formation, Sabiou M. Inoua, Vernon L. Smith

ESI Working Papers

"The 1870s neoclassical marginal revolution in economics culminated a century later in a striking conclusion: The core utility maximization principle of neoclassical economics was shown to have no interesting implication for aggregate market behavior (Sonnenschein, 1972, 1973a, 1973b; Debreu, 1974; Mantel, 1974; Kirman, 1989; Shafer & Sonnenschein, 1993; Rizvi, 2006). We argue that neoclassical price theory was founded on two axioms—price-taking behavior and the law of one price in a market—that, if imposed on the theory, were logically inconsistent with a theory of market price formation. This logical gap in neoclassical theory was filled essentially with thought experiments: Jevons derives …

Asset Price Volatility And Price Extrema, Carey Caginalp, Gunduz Caginalp

ESI Publications

The relationship between price volatility and expected price market extremum is examined using a fundamental economics model of supply and demand. By examining randomness through a microeconomic setting, we obtain the implications of randomness in the supply and demand, rather than assuming that price has randomness on an empirical basis. Within a general setting of changing fundamentals, the volatility is maximum when expected prices are changing most rapidly, with the maximum of volatility reached prior to the maximum of expected price. A key issue is that randomness arises from the supply and demand, and the variance in the stochastic differential …

Exchange Rate Regimes And Economic Growth, Amandarae Matthew

Undergraduate Theses

This paper explores the relationship between economic growth and exchange rate regimes among countries of lower income, lower middle income, upper middle income, and high-income countries. Countries must make careful consideration when choosing an exchange rate regime because each regime can have different long-term effects. A cross section pooled time series data will be used for a sample of 42 countries over the period of 2000-2018. Multiple models will examine the various relationships between types of exchange rate regimes, changes in exchange rate regimes, and economic growth. The components of the models being tested include political stability, change in terms …

The End Of Zero Returns And The Last Dollar: Can New York State Create A Collective Store Of Value, Crowdsource Wealth, And Fund Its Colleges And Universities Using Cryptocurrency?, Edward Lehner

Publications and Research

This brief personal statement, citing the previous work of the Bronx Community College Cryptocurrency Research Laboratory (BCC Lab), advocates for a private New York State Money to fund New York State’s public higher education. Attempting to shed most of the academic language and the formalities of research-driven writing, this short statement frames two distinct arguments. The first contention is that New York State residents need a means by which to store value outside of the traditional banking and financial systems due to massive Federal Reserve printing that is centered primarily on rescuing fledgling Wall Street profits and mitigating reckless businesses …

Viral Social Media Videos Can Raise Pro-Social Behaviours When An Epidemic Arises, Youting Guo, Jason Shachat, Matthew J. Walker, Lijia Wei

ESI Working Papers

At the onset of an epidemic, can viral social media videos induce the high levels of trust and pro-sociality required for a successful community response? Shortly after the outbreak of the COVID-19 virus in Wuhan, China, we conducted an experiment assessing the impact of viral videos on individual preferences and pro-social behaviour. Prior to the experiment, participants viewed one of three videos culled from Chinese social media: a central government leader visiting a local hospital and supermarket, health care volunteers transiting to Wuhan, or an emotionally neutral video unrelated to the emergency. Viewing one of the first two videos leads …

The Ncaa's Breaking Point For Equal Opportunity: A Title Ix Perspective On Name, Image, And Likeness Sponsorship Legislation, Joshua C. Sorbe

Honors Thesis

This paper analyzes the efficacy of Title IX when considering national name, image, and likeness (NIL) legislation and NCAA Division I athletic department expenditure behavior. To answer this question, I analyzed Title IX’s legislative history, current compliance rules, recent litigation, and academic literature. Using publicly-available data reported to the US Department of Education, I performed regression analysis on institutional characteristics and expenditure behaviors to assess the impact that spending behavior has on gender equity. My results show that revenue-generating sports had a large impact on spending equity, and disparities in expenditures are more distinct than participation. Ultimately, the market-based exceptions …

A Test Of The Modigliani-Miller Theorem, Dividend Policy And Algorithmic Arbitrage In Experimental Asset Markets, Tibor Neugebauer, Jason Shachat, Wiebke Szymczak

ESI Working Papers

Modigliani and Miller showed that the market value of the company is in dependent of its capital structure, and suggested that dividend policy makes no difference to this law of one price. We experimentally test the MM theorem in a complete market with two simultaneously traded assets, employing two experimental treatment variations. The first variation involves the dividend stream. According to this variation the dividend payout order is either identical or independent. The second variation involves the market participation, or not, of an algorithmic arbitrageur. We find that Modigliani-Miller's law of one price can be supported on average with or …

Essay 1: How We Feel: The Role Of Macro-Economic Sentiment In Advertising Spending-Sales Relationship; Essay 2: It Was The Best Of Times; It Was The Worst Of Times: The Effect Of Emotional Uncertainty And Arousal On Healthy Food Choices, Leila Khoshghadam

Theses and Dissertations in Business Administration

Essay 1: Controversies regarding the advertising spending-sales relationship have spawned many studies in marketing. Previous research on macroeconomic influencers of this relationship has focused mostly on objective macroeconomic indicators such as cyclical contraction and expansion. Extending these previous studies, the current research argues that sales response to advertising is also contingent upon the pervasive feelings present in the macroeconomic environment, above and beyond the influence from objective macroeconomic factors. Specifically, it argues that future outlook negativity and uncertainty in macroeconomic sentiment can affect the ad spending-sales relationship. Analyzing sales and advertising spending data for salty snacks in conjunction with macroeconomic …

Do Public Program Benefits Crowd Out Private Transfers In Developing Countries? A Critical Review Of Recent Evidence, Plamen Nikolov, Matthew Bonci

Economics Faculty Scholarship

Precipitated by rapid globalization, rising inequality, population growth, and longevity gains, social protection programs have been on the rise in low- and middle-income countries (LMICs) in the last three decades. However, the introduction of public benefits could displace informal mechanisms for risk-protection, which are especially prevalent in LMICs. If the displacement of private transfers is considerably large, the expansion of social protection programs could even lead to social welfare loss. In this paper, we critically survey the recent empirical literature on crowd-out effects in response to public policies, specifically in the context of LMICs. We review and synthesize patterns from …

Power, Property Rights, And Political Development: A Property Rights Theory Of Political Development And Its Application To The Study Of Development In Honduras And Costa Rica, Ricardo R. Noé

USF Tampa Graduate Theses and Dissertations

Following the dissolution of the Federal Republic of Central America in 1838, Costa Rica and Honduras were highly underdeveloped politically and economically, while at the same time lacking a strong conservative presence found in the more politically established and economically developed Central American countries of Guatemala and El Salvador.

However, By the late 20th century Costa Rica established itself as a bastion of democracy in Latin America, supported by a strong middle class. While on the other hand, Honduras would fall victim to a continuous string of coup d’états, with the last being in 2009, by a military that did …

Working Paper No. 41, On Baseball And Thorstein Veblen’S Understanding Of Instincts, Brian Burres

Working Papers in Economics

This inquiry seeks to establish that, Thorstein Veblen’s understanding of instincts can be used to offer insights into to the game of baseball. Veblen’s view of instincts serves as a way for understanding different behaviors exhibited by those involved in the game. Behaviors can be broadly categorized into “selfregarding” and “group-regarding”. Applying Veblen’s understanding of instincts to baseball offers a novel perspective on actions taken and behaviors displayed by those participating in, as well as those who stand behind the game. Some human actions appear to be for the betterment of the game, and these actions align with Veblen’s understanding …

Working Paper No. 43, Towards A Veblenian Theory Of Instincts, Duane Murray

Working Papers in Economics

This inquiry seeks to establish that in his writings, Thorstein Veblen offers a comprehensive and insightful contribution towards an understanding of instincts. Instincts can be viewed self-regarding and thought to promote the survival of the individual. Other instincts can be classified as group-regarding and contribute towards the continuation of society. Instincts can lead to the formation of habits and to combine to create societal institutions that govern human behavior. With the passage of time, instincts, habits, and institutions are thought to contribute to economic and societal evolution.

Working Paper No. 52, Some Of The Profound Effects Of World War I On France, Zachary Mckinster

Working Papers in Economics

This inquiry seeks to establish that World War I engendered profound effects over the population, economy, and nation of France. The word ‘profound’ suggests significant and permanent changes affecting individuals, the society, and the economy at large. Penetrating into France’s 20th century history through the account of Louis Barthas, an infantry soldier, provides stark contrast to ‘conventional’ narratives through providing insights into some of the effects of industrialized combat, thereby allowing for a deeper understanding of the traumas suffered. Clarifying developments taking place in the French economy provides a foundation for better understanding some of the effects of WWI. This …

Integration Of And Deliveries Among The World Zionist Organization, Israel, And Diaspora Countries: System Articulation With The Social Fabric Matrix, F. Gregory Hayden

Department of Economics: Faculty Publications

The religious economics (not economics of religion) concern here is the relationship between the World Zionist Organization (WZO) and Israel, which is known as a geopolitical power in its region and which is also known as an economic success story. Joseph Schumpeter and Karl Polanyi explained how the political economy of medieval Europe was influenced and guided by Christian morality. This paper extends the analysis of religious economics by using the social fabric matrix of original institutional economics to define and structure the integration of the WZO, Israel, and the Diaspora countries. This allows us to observe how to conduct …

Random Assignment Of Bundles, Shurojit Chatterji, Peng Liu

Research Collection School Of Economics

We propose a model studying the random assignments of bundles with no free disposal. The key difference between our model and the one where objects are allocated (see Bogomolnaia and Moulin (2001)) is one of feasibility. The implications of this difference are significant. Firstly, the characterization of sd-efficient random assignments is more complex. Secondly, we are able to identify a preference restriction, called essential monotonicity, under which the random serial dictatorship rule (extended to the setting with bundles) is equivalent to the probabilistic serial rule (extended to the setting with bundles). This equivalence implies the existence of a rule on …

The Classical Theory Of Supply And Demand, Sabiou M. Inoua, Vernon L. Smith

ESI Working Papers

This paper introduces and formalizes the classical view on supply and demand, which, we argue, has an integrity independent and distinct from the neoclassical theory. Demand and supply, before the marginal rev-olution, are defined not by an unobservable criterion such as a utility func-tion, but by an observable monetary variable, the reservation price: the buyer’s (maximum) willingness to pay (WTP) value (a potential price) and the seller’s (minimum) willingness to accept (WTA) value (a potential price) at the marketplace. Market demand and supply are the cumulative distri-bution of the buyers’ and sellers’ reservation prices, respectively. This WTP-WTA classical view of …

Let’S Chat... When Communication Promotes Efficiency In Experimental Asset Markets, Brice Corgnet, Mark Desantis, David Porter

ESI Working Papers

The growing prevalence of stock market chat rooms and social media suggests communication between traders may affect market outcomes. Using data from a series of laboratory experiments, we study the causal effect of trader communication on the price efficiency of markets. We show that communication allows markets to convey private information more effectively. This effect is most pronounced when the communication platform publicizes a reputation score that might identify a person as not being truthful. This illustrates the need for market designers to consider social interactions when designing market institutions to leverage the social motives that foster information aggregation.

Random Assignments Of Bundles, Shurojit Chatterji, Liu Peng

Research Collection School Of Economics

We propose a model studying the random assignments of bundles with no free disposal. The key difference between our model and the one where objects are allocated (see Bogomolnaia and Moulin (2001)) is one of feasibility. The implications of this difference are significant. Firstly, the characterization of sd-efficient random assignments is more complex. Secondly, we are able to identify a preference restriction, called essential monotonicity, under which the random serial dictatorship rule (extended to the setting with bundles) is equivalent to the probabilistic serial rule (extended to the setting with bundles). This equivalence implies the existence of a rule on …

Blockchain Technology And The Future Of Video Games, Is Presence Still Relevant?, Stef Nicovich, Jessica Scheld

Atlantic Marketing Association Proceedings

No abstract provided.

An Empirical Study Of The Sentiment Capital Asset Pricing Model, Soroush Ghazi, Mark Schneider

ESI Working Papers

What is market sentiment? This paper takes a new approach to this question and de- rives a formula for market sentiment as a function of the risk-free rate, the price/dividend ratio, and the conditional stock market volatility. The formula is derived from a representative agent with a prospect theory probability weighting function. We estimate the model and find that our sentiment measure correlates positively with the leading sentiment indexes. The model matches the equity premium while generating a low and stable risk-free rate with low risk aversion. We also apply the model to explain other anomalies for the aggregate stock …