News-Driven Expectations And Volatility Clustering,
2019
Chapman University
News-Driven Expectations And Volatility Clustering, Sabiou M. Inoua
ESI Working Papers
Financial volatility obeys two well-established empirical properties: it is fat-tailed (power-law distributed) and it tends to be clustered in time. Many interesting models have been proposed to account for these regularities, notably agent-based computational models, which typically invoke complicated mechanisms, however. It can be shown that trend-following speculation generates the power law in an intrinsic way. But this model cannot exaplain clustered volatility. This paper extends the model and offers a simple explanation for clustered volatility: the impact of exogenous news on traders’ expectations. Owing to the famous no-trade results, rational expectations, the dominant model of news-driven expectations, is hard …
Price Signaling And Bargain Hunting In Markets With Partially Informed Populations,
2019
Chapman University
Price Signaling And Bargain Hunting In Markets With Partially Informed Populations, Mark Schneider, Daniel Graydon Stephenson
ESI Working Papers
Classical studies of asymmetric information focus on situations where only one side of a market is informed. This study experimentally investigates a more general case where some sellers are informed and some buyers are informed. We establish the existence of semiseparating perfect Bayesian equilibria where prices serve as informative signals of quality to uninformed buyers, while informed buyers can often leverage their informational advantage by purchasing high quality items from uninformed sellers at bargain prices. These models provide a rational foundation for the co-existence of bargains, price signaling, and Pareto efficiency in markets with asymmetric information. We test these theoretical …
Cross-Country Evidence Of Corruption Spillovers To Formal And Informal Entrepreneurship,
2019
Bryant University
Cross-Country Evidence Of Corruption Spillovers To Formal And Informal Entrepreneurship, Aziz N. Berdiev, James Saunoris
Economics Faculty Journal Articles
Using cross‐country data this paper examines the spillovers of corruption to formal and informal entrepreneurship in neighboring countries. Whereas research has shown that entrepreneurs move underground to escape corruption, we argue that entrepreneurs may also seek refuge in neighboring countries. Indeed, the empirical results show that in response to a ceteris paribus increase in corruption in neighboring countries formal entrepreneurship increases in the home country with no effect on informal entrepreneurship. This is consistent with entrepreneurs circumventing corrupt public officials by immigrating to countries with presumably less corruption. These results withstand a battery of robustness checks. (JEL D73, L26)
Identity And The Self-Reinforcing Effects Of Norm Compliance,
2019
Simon Fraser University
Identity And The Self-Reinforcing Effects Of Norm Compliance, Mark A. Pickup, Erik O. Kimbrough, Eline A. Rooij
Economics Faculty Articles and Research
When making political and economic decisions (e.g., voting, donating money to a cause), individuals consider the expectations of groups with which they identify. These expectations are injunctive norms, shared beliefs about appropriate behavior for identity group members, and individuals' choices reflect trade‐offs between adherence to these norms and other preferences. We show that when those who identify moderately/strongly with the group pay a cost as a consequence of avoiding a norm violation, they subsequently view the norms as stronger than those that paid no cost. This is evident in their greater willingness to pay an additional cost to punish/reward other …
Do Appeals To Donor Benefits Raise More Money Than Appeals To Recipient Benefits? Evidence From A Natural Field Experiment With Pick.Click.Give.,
2019
University of Chicago
Do Appeals To Donor Benefits Raise More Money Than Appeals To Recipient Benefits? Evidence From A Natural Field Experiment With Pick.Click.Give., John A. List, James J. Murphy, Michael K. Price, Alexander G. James
ESI Working Papers
We partnered with Alaska’s Pick.Click.Give. Charitable Contributions Program to implement a statewide natural field experiment with 540,000 Alaskans designed to explore whether targeted appeals emphasizing donor benefits through warm glow impact donations. Results highlight the relative import of appeals to self. Individuals who received such an appeal were 4.5 percent more likely to give and gave 20 percent more than counterparts in the control group. Yet, a message that instead appealed to recipient benefits had no effect on average donations relative to the control group. We also find evidence of long-run effects of warm glow appeals in the subsequent year.
A Class Of N-Player Colonel Blotto Games With Multidimensional Private Information,
2019
University of Zurich
A Class Of N-Player Colonel Blotto Games With Multidimensional Private Information, Christian Ewerhart, Dan Kovenock
ESI Working Papers
We consider a class of incomplete-information Colonel Blotto games in which N ≥ 2 agents are engaged in (N + 1) battlefields. An agent’s vector of battlefield valuations is drawn from a generalized sphere in Lp-space. We identify a Bayes-Nash equilibrium in which any agent’s resource allocation to a given battlefield is strictly monotone in the agent’s valuation of that battlefield. In contrast to the single-unit case, however, agents never enjoy any information rent. We also outline an extension to networks of Blotto games.
Cooperation In Indefinitely Repeated Helping Games: Existence And Characterization,
2019
Chapman University
Cooperation In Indefinitely Repeated Helping Games: Existence And Characterization, Gabriele Camera, Alessandro Gioffré
ESI Working Papers
Experiments that investigate the spontaneous emergence of money in laboratory societies rely on indefinitely repeated helping games with random matching (Camera et al., 2013; Camera and Casari, 2014). An important open issue is the lack of a general proof of existence of an equilibrium capable of supporting the efficient allocation under private monitoring, without money. Here, we fill this gap by offering a general proof, as well as by characterizing the efficient non-monetary equilibrium. This technique can be extended to study games with simultaneous actions.
Breaking Up: Experimental Insights Into Economic (Dis)Integration,
2019
Chapman University
Breaking Up: Experimental Insights Into Economic (Dis)Integration, Gabriele Camera, Lukas Hohl, Rolf Weder
ESI Working Papers
Standard international economic theory suggests that people should embrace economic integration because it promises large gains. But recent events such as Brexit indicate a desire for economic disintegration. Here we report results of an experiment, based on a strategic analytical framework, of how size and distribution of potential gains from integration influence outcomes and individuals’ inclination to embrace integration. We find that cross-country inequality in potential gains acts as a friction to realize those gains. This suggests that to better understand recent phenomena, international economic theory should account for distributional considerations and behavioral aspects it currently ignores.
Introduction To The Special Issue On The Blue Economy Of Bangladesh,
2019
World Bank
Introduction To The Special Issue On The Blue Economy Of Bangladesh, Pawan G. Patil, Pierre Failler, Khurshed Alam
Journal of Ocean and Coastal Economics
Introduction to the Special Edition on the Blue Economy of Bangladesh by the Editors of the Special Edition.
Make It Too Difficult And I’Ll Give-Up; Let Me Succeed And I’Ll Excel: The Interaction Between Assigned And Personal Goals,
2019
Naval Postgraduate School
Make It Too Difficult And I’Ll Give-Up; Let Me Succeed And I’Ll Excel: The Interaction Between Assigned And Personal Goals, James Fan, Joaquin Gomez-Minambres, Samuel Smithers
ESI Working Papers
We examine the motivational effects of setting both assigned and personal non-binding goals on a real effort laboratory experiment. In order to derive conjectures for our experiment, we develop a model with goal-dependent preferences. In line with previous studies, we find that goal setting leads to a higher performance. We also find that goal-setting is most effective if subjects were able to achieve previous goals. Therefore, in goal setting, “success breeds success”. In particular, we observe that when subjects are initially allowed to attain assigned goals, they are better at self-motivating in the future when performing under personal goals.
Investment Choice Architecture In Trust Games: When “All-In” Is Not Enough,
2019
Chapman University
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!,
2019
Chapman University
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,
2019
Naval Postgraduate School
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,
2019
CUNY Graduate Center
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,
2019
Chapman University
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,
2019
Universitat de les Illes Balears
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,
2019
Université de Lorraine
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,
2019
Simon Fraser University
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,
2019
Université Toulouse
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,
2019
Georgia State University
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 …
