Other Economics Commons^™

New Hampshire Effect: Behavior In Sequential And Simultaneous Multi-Battle Contests, Shakun D. Mago, Roman M. Sheremeta

ESI Working Papers

Sequential multi-battle contests are predicted to induce lower expenditure than simultaneous contests. This prediction is a result of a “New Hampshire Effect” – a strategic advantage created by the winner of the first battle. Although our laboratory study provides evidence for the New Hampshire Effect, we find that sequential contests generate significantly higher (not lower) expenditure than simultaneous contests. This is mainly because in sequential contests, there is significant over-expenditure in all battles. We suggest sunk cost fallacy and utility of winning as two complementary explanations for this behavior and provide supporting evidence.

Nebraska Snaps Back, Eric Thompson

Business in Nebraska

Nebraska will fully participate in stronger U.S. economic growth. While the farming sector will continue to face challenges, farm income will rise slightly during the forecast period, and consequently, will no longer detract from Nebraska economic growth. Nebraska will match U.S. job growth, with job growth particularly strong in services, construction, and retail trade. The agricultural processing sector also will expand employment. Projected growth rates for 2018 through 2020 are presented in Table 1.

Employment will grow by 1.1% to 1.2% per year, matching the national job growth rate in 2019 and 2020. Non-farm income will grow between 3.9% and …

Poverty Mapping Using Convolutional Neural Networks Trained On High And Medium Resolution Satellite Images, With An Application In Mexico, Boris Babenko, Jonathan Hersh, David Newhouse, Anusha Ramakrishnan, Tom Swartz

Economics Faculty Articles and Research

Mapping the spatial distribution of poverty in developing countries remains an important and costly challenge. These “poverty maps” are key inputs for poverty targeting, public goods provision, political accountability, and impact evaluation, that are all the more important given the geographic dispersion of the remaining bottom billion severely poor individuals. In this paper we train Convolutional Neural Networks (CNNs) to estimate poverty directly from high and medium resolution satellite images. We use both Planet and Digital Globe imagery with spatial resolutions of 3-5 m2 and 50 cm2 respectively, covering all 2 million km2 of Mexico. Benchmark poverty estimates come from …

The Perceived Return On College Investment In Relation To Economic Expectations Of Students At The University Of Maryland, Joshua S. Roston

Undergraduate Economic Review

This paper presents the results of a survey conducted in the spring semester of 2017 of University of Maryland students. The results illustrate how University of Maryland students weigh the decision to attend college in terms of their perceived current economic situation and future expectations as well as predicted return on investment. A body of economic literature on the perception of return on investment from attending college exists already and this study hopes to add to the discussion as its results are unexpected. The results imply that the current generation of college students feels uncertain over the worthwhileness of higher …

From Local To Global: The Role Of Interdisciplinary Place-Based Research In Teaching Environmental Economics, Sean P. Macdonald

Publications and Research

This chapter examines the value of student engagement in interdisciplinary place-based research - where the exploration of “place” assumes a central component of students’ semester research projects in an undergraduate Environmental Economics class. It considers the benefits of teaching from an interdisciplinary perspective while employing the resources of the local community as a laboratory where students engage in research linked to place - the local community, urban space or a virtual location - encouraging students to make meaningful connections between the theoretical study of local and global environmental problems and the actual observation and investigation of those challenges in real …

Who’S Holding Out? An Experimental Study Of The Benefits And Burdens Of Eminent Domain, Abel Winn, Matthew W. Mccarter

ESI Publications

A substantial literature identifies seller holdout as a serious obstacle to land assembly, implying that eminent domain is an appropriate policy response. We conduct a series of laboratory experiments to test this view. We find that when there is no competition and no eminent domain, land assembly suffers from costly delay and failed assembly: participants lose 18.8% of the available surplus on average. Much of the inefficiency is due to low offers from the buyers (“buyer holdout”) rather than strategic holdout among sellers. When buyers can exercise eminent domain the participants lose 19.4% of the surplus on average. This loss …

Fossil Fuel Opportunities For West Virginia: 2017 Update, Eric Bowen, Christiadi

Bureau of Business & Economic Research

No abstract provided.

Information (Non)Aggregation In Markets With Costly Signal Acquisition, Brice Corgnet, Cary Deck, Mark Desantis, David Porter

ESI Working Papers

Markets are often viewed as a tool for aggregating disparate private knowledge, a stance supported by past laboratory experiments. However, traders’ acquisition cost of information has typically been ignored. Results from a laboratory experiment involving six treatments varying the cost of acquiring signals of an asset’s value suggest that when information is costly, markets do not succeed in aggregating it. At an individual level, having information improves trading performance, but not enough to offset the cost of obtaining the information. Although males earn more through trading than females, this differential is offset by the greater propensity of males to buy …

Nebraska Monthly Economic Indicators: September 20, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 fell by 0.38% during August of 2017. The decline in the LEI-N, which is designed to predict economic activity six months into the future, suggests that the Nebraska economy will grow slowly during the first few months of 2018. The drop in the indicator was primarily due to a decline in manufacturing hours-worked during August. Building permits for single-family homes and airline passenger enplanements also dropped slightly. There were two positive components of the LEI-N. Businesses responding to the August Survey of Nebraska Business reported plans to increase sales and employment over …

The Welfare Effects Of Civil Forfeiture, Michael Preciado, Bart J. Wilson

ESI Publications

Using a laboratory experiment we explore competing claims on the welfare effects of civil forfeiture. Experiment participants are tasked with making trade-offs in allocating resources “to fight crime” with and without the ability to seize and forfeit assets. It is an open question whether the societal impact of reducing crime is greater in a world with or without civil forfeiture. Proponents of civil forfeiture argue that the ill-gotten gains of criminals can be used by law enforcement to further fight crime. Opponents claim that the confiscation of assets by law enforcement distorts the prioritization of cases by focusing attention, not …

No Mere Tautology: The Division Of Labor Is Limited By The Division Of Labor, Andrew Smyth, Bart J. Wilson

ESI Working Papers

We explore the intersection of growth theory and the theory of the firm with an experiment. Economic growth is possible in our experiment when agents specialize to exploit increasing returns. We find that low opportunity costs are sufficient for Marshallian internal economies, but that Marshallian external economies are slow to emerge in four probing treatment conditions. Transaction costs do not hamper external economies as we anticipated prior to collecting data. When external economies falter, it is because new ideas about the cost and value of more extensive specialization fail to emerge. Ideas are what make further divisions of the …

Nebraska Business And Consumer Confidence Indexes: September 1, 2017, Eric Thompson

Leading Economic Indicator Reports

Nebraska’s consumer and business confidence fell during August. The Consumer Confidence Index – Nebraska (CCI-N) stood at 100.9 in August, below the reading of 102.5 from July. Notably, the CCI-N remained above the neutral value of 100.0 during August. The outlook of Nebraska businesses remained strong. The Business Confidence Index – Nebraska (BCI-N) stood at 104.2 in August, close to the value of 105.1 during July, and well above the neutral value of 100.0. When asked about the most important issue facing their business, customer demand was mentioned by 35 percent of business respondents. Businesses also faced growing competition in …

A Micro-Invstigation Of The Reasons Behind Demographic Transition In Egypt: Will Egypt Witness A Demographic Window?, Sarah El-Khishin, Magued Osman, Heba Nassar

Economics

Abstract: The paper investigates the factors behind the slowdown in demographic transition in Egypt across different geographical and socio-economic groups. The authors relax the assumption of a uniform fertility behavior across households and re-visit interrelationships between demography and economic indicators from a micro perspective. Empirical findings reject mainstream beliefs that slow demographic transition in Egypt is attributed to the poorer, south-located and less-educated households. Fertility behaviors in Urban Egypt and among the high-educated females are found to be key contributors to the slowdown of demographic transition. Unemployment among the high-educated females in addition to lower public and foreign spending on …

The Attack And Defense Of Weakest Link Networks, Dan Kovenock, Brian Roberson, Roman M. Sheremeta

ESI Working Papers

We experimentally test the qualitatively different equilibrium predictions of two theoretical models of attack and defense of a weakest-link network of targets. In such a network, the attacker’s objective is to successfully attack at least one target and the defender’s objective is to defend all targets. The models differ in how the conflict at each target is modeled — specifically, the lottery and auction contest success functions (CSFs). Consistent with equilibrium in the auction CSF model, attackers utilize a stochastic “guerrilla-warfare” strategy, which involves randomly attacking at most one target with a random level of force. Inconsistent with equilibrium in …

Loss Aversion And The Quantity-Quality Tradeoff, Jared Rubin, Anya Samek, Roman M. Sheremeta

ESI Working Papers

Firms face an optimization problem that requires a maximal quantity output given a quality constraint. But how do firms incentivize quantity and quality to meet these dual goals, and what role do behavioral factors, such as loss aversion, play in the tradeoffs workers face? We address these questions with a theoretical model and an experiment in which participants are paid for both quantity and quality of a real effort task. Consistent with basic economic theory, higher quality incentives encourage participants to shift their attention from quantity to quality. However, we also find that loss averse participants shift their attention from …

Nebraska Monthly Economic Indicators: August 23, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 rose by 0.56% during July of 2017. The increase in the LEI-N, which is designed to predict economic activity six months into the future, suggests that the Nebraska economy will grow through the first month of 2018. Four components of the indicator improved during July. Business expectations were solid and manufacturing hours grew. The value of the U.S. dollar continued its recent decline, a positive sign for Nebraska’s export-oriented businesses. Further, in a positive sign for the labor market, there also was a drop in initial claims for unemployment insurance. In terms …

Credit Risk And Corporate Governance, Olivier Mugisho Mudekereza

Theses and Dissertations

Is the executive’s compensation structure influenced by the credit rating assigned to his company? I analyze a panel of U.S. public firms using the random-effects and fixed-effects estimations. Compared to firms with lower credit risk, I find that firms facing higher probability of default provide more incentives for their CEOs.

Human And Monkey Responses In A Symmetric Game Of Conflict With Asymmetric Equilibria, Sarah F. Brosnan, Sara A. Price, Kelly Leverett, Laurent Prétôt, Michael Beran, Bart J. Wilson

ESI Publications

To better understand the evolutionary history of human decision-making, we compare human behavior to that of two monkey species in a symmetric game of conflict with two asymmetric equilibria. While all of these species routinely make decisions in the context of social cooperation and competition, they have different socio-ecologies, which leads to different predictions about how they will respond. Our prediction was that anti-matching would be more difficult than matching in a symmetric coordination with simultaneous moves. To our surprise, not only do rhesus macaques frequently play one asymmetric Nash equilibrium, but so do capuchin monkeys, whose play in the …

Historical Cost And Conservatism Are Joint Adaptations That Help Identify Opportunity Cost, Sudipta Basu, Gregory B. Waymire

ESI Publications

Braun (The ecological rationality of historical costs and conservatism. Accounting, Economics and Law: A Convivium, this issue) argues that the traditional accounting principles underlying the revenue-expense approach such as Historical Cost and Conservatism are ecologically rational in that they help organizations survive better in uncertain economic environments. More importantly, Braun argues that the revenue-expense approach generates new private information, which informs markets and makes them more effective (Hayek, 1945, The use of knowledge in society. The American Economic Review, 35(4), 519–530), as opposed to merely reflecting back market data under the asset-liability approach (e.g. Sunder, 2011, IFRS monopoly: …

Nebraska Business And Consumer Confidence Indexes: August 4, 2017, Eric Thompson

Leading Economic Indicator Reports

Consumer and business confidence remained strong in Nebraska during July but fell from June levels. The Consumer Confidence Index – Nebraska (CCI-N) stood at 102.5 in July after a reading of 104.7 during June. Despite the decline of 2.2, the CCI-N remained above the neutral value of 100.0, indicating strong consumer confidence. The outlook of Nebraska businesses also was strong. The Business Confidence Index – Nebraska (BCI-N) fell to 105.1 in July from 109.2 in June. The BCI-N remained well above the neutral value in July, despite the 4.1 point decline, which indicates that business confidence is also strong in …