nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2006‒12‒01
four papers chosen by
Walter Frisch
University Vienna

  1. Do Individuals Recognize Cascade Behavior of Others? - An Experimental Study - By Tim Grebe; Julia Schmid; Andreas Stiehler
  2. Modelling autoregressive processes with a shifting mean By González, Andrés; Teräsvirta, Timo
  3. Social Networks and Employment - An Experimental Analysis By Siegfried Berninghaus; Sven Fischer; Werner Güth
  4. Games of Connectivity By Pradeep Dubey; Rahul Garg

  1. By: Tim Grebe; Julia Schmid; Andreas Stiehler
    Abstract: In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al., 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating in the prediction game. We find increasing maximum prices the more coinciding predictions of predecessors are observed, regardless of whether additional information is revealed by these predictions. Individual price patterns of more than two thirds of the participants indicate that cascade behavior of predecessors is not recognized.
    Keywords: Information Cascades, Bayes' Rule, Decision Under Risk and Uncertainty, Experimental Economics.
    JEL: C91 D81 D82
    Date: 2006–11
  2. By: González, Andrés (Unidad de investigaciones économicas, Banco de la República); Teräsvirta, Timo (Department of Economics, University of Aarhus, and Department of Economic Statistics, Stockholm School of Economics)
    Abstract: In this paper we introduce an autoregressive model with a deterministically shifting intercept. This implies that the model has a shifting mean and is thus nonstationary but stationary around a nonlinear deterministic component. The shifting intercept is defined as a linear combination of logistic transition functions with time as the transition variables. The number of transition functions is determined by selecting the appropriate functions from a possibly large set of alternatives using a sequence of specification tests. This selection procedure is a modification of a similar technique developed for neural network modelling by White (2006). A Monte Carlo experiment is conducted to show how the proposed modelling procedure and some of its variants work in practice. The paper contains two applications in which the results are compared with what is obtained by assuming that the time series used as examples may contain structural breaks instead of smooth transitions and selecting the number of breaks following the technique of Bai and Perron (1998).
    Keywords: deterministic shift; nonlinear autoregression; nonstationarity; nonlinear trend; smooth transition; structural change
    JEL: C22 C52
    Date: 2006–09–27
  3. By: Siegfried Berninghaus; Sven Fischer; Werner Güth
    Abstract: There is robust field data showing that a frequent and successful way of looking for a job is via the intermediation of friends and relatives. Here we want to explore this experimentally. Participants first play a simple public good game with two interaction partners ("friends"), and share whatever they earn this way with two different sharing partners ("cousins") who in turn have different friends. Thus a participant's social network contains two "friends" and two "cousins". In the second phase of the experiment participants learn about a job opportunity for themselves and one additional vacancy and decide whom of their network they want to recommend and, if so, in which order. In case of coemployment, both employees compete for a bonus. Will others be recommend for the additional job in spite of this competition, will "friends" or "cousins" be preferred and how does this depend on contributions (of "friends") or shared profits (with "cousins")? Our findings are partly puzzling. Most participants, for instance, recommend quite actively but compete very fiercely for the bonus.
    Keywords: Unemployment, Social Networks, Job Search
    JEL: C91 J65
    Date: 2006–11
  4. By: Pradeep Dubey (Center for Game Theory in Economics, Stony Brook); Rahul Garg (IBM India Research Lab, New Delhi)
    Abstract: We consider a communications network in which users transmit beneficial information to each other at a cost. We pinpoint conditions under which the induced cooperative game is supermodular (convex). Our analysis is in a lattice-theoretic framework, which is at once simple and able to encompass a wide variety of seemingly disparate models.
    Keywords: Information lattice, Multicast/unicast transmission, Cooperative games, Shapley value, Convex/supermodular games
    JEL: C71 D82 L96
    Date: 2006–11

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