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on Microeconomics |
| By: | Francisco Martínez-Sánchez (Universidad de Alicante) |
| Abstract: | In this paper we analyze firms' ability to tacitly collude on pricesin an infinitely repeated duopoly game of vertical productdifferentiation. We show that firms collude if and only if their discountfactor is high enough, i.e. if they value future profits sufficiently. We alsoshow that a lower cost of copying facilitates collusion but that a higherquality of the copy hinders collusion. Thus, the overall effect of thesenew characteristics of copies made by consumers is ambiguous. |
| Keywords: | Collusion, competition, piracy, consumers, cost of copying, |
| JEL: | D40 K42 L13 L40 O34 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2009-20&r=mic |
| By: | Kurt R. Brekke (Department of Economics and Helth Economics Bergen, Norwegian School of Economics and Business Administration); Luigi Siciliani (Department of Economics and Centre for Health Economics, University of York, Heslington); Odd Rune Straume (Universidade do Minho - NIPE) |
| Abstract: | We study the relationship between competition and quality within a spatial competition framework where firms compete in prices and quality. We generalise existing literature on spatial price-quality competition along several dimensions, including utility functions that are non-linear in income and cost functions that are non-separable in output and quality. Our main message is that the scope for a positive relationship between competition and quality is underestimated in the existing literature. If we allow for income effects by assuming that utility is strictly concave in income, we find that lower transportation costs always lead to higher quality. The presence of income effects might also reverse a previously reported negative relationship between the number of firms and equilibrium quality. This reversal result is further strenghtened if there are cost substitutabilities between output and quality. Equilibrium quality provision is always less than socially optimal in the presence of income effects. |
| Keywords: | Spatial competition; Quality; Income effects. |
| JEL: | D21 L13 L15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:21/2009&r=mic |
| By: | HUANG Weihong (Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore; Nanyang Technological University, Singapore) |
| Abstract: | The advantage of price-taking behavior in achieving relative profitability in oligopolistic quantity competition has been much appreciated recently from economic dynamics and evolutionary game theory, respectively. The current research intends to provide a direct economic interpretation as well as intuitive justification and further to build a linkage between different perspectives. In particular, a detailed illustration of an arbitrary oligopoly that produce a homogenous product is presented. So long as the outputs of other firms are fixed and the residual demand is downward sloping, for any two identical firms whose cost functions are convex, their output space can be divided symmetrically into mutually exclusive relatively profitability regimes. Furthermore, there exist infinitely many relative-profitability reactions for each firm in such “residual” duopoly, all of which intersect at the “residual” Walrasian equilibrium. This suggests that sticking to this dynamical equilibrium output constantly (i.e., the static Walrasian strategy) turns out to be a relative-profitability strategy at each period. On the other hand, regardless of what strategies its rival may take, a firm adopting price-taking strategy or more generally defined dynamic Walrasian strategies can achieve the relative profitability if an intertemporal equilibrium is reached. The methodology adopted and the conclusions arrived clarify the confusions and misunderstandings due to the different usages of same terminologies under different frameworks and generalize the previous available results in the literature to a higher level and a broader context. |
| Keywords: | Price-taking, Walrasian behavior, Relative profit, Oligopoly, Cournot, dynamic Walrasian strategy. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:0903&r=mic |
| By: | Gábor Pellényi; Tamás Borkó |
| Abstract: | We examine the impact of bank competition and institutional factors on net firm entry in a sample of European manufacturing industries over the 1995-2006 period. Taking into account industry differences in the need for external finance, we find that bank competition helps firm entry. In addition, better institutions - especially legal structure and property rights - also have a positive impact, particularly through a better functioning financial system. |
| Keywords: | market structure, banks, market entry, manufacturing, financial development |
| JEL: | D4 G21 L11 L60 O16 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwfin:diwfin05010&r=mic |
| By: | Nicholas Economides (Stern School of Business, NYU); Ioannis Lianos (Faculty of Laws, University College London) |
| Abstract: | The Microsoft cases in the United States and in Europe have been influential in determining the contours of the substantive liability standards for dominant firms in US antitrust law and in EC Competition law. The competition law remedies that were adopted, following the finding of liability, seem, however, to constitute the main measure for the “success” of the case(s). An important disagreement exists between those arguing that the remedies put in place failed to address the roots of the competition law violation identified in the liability decision and others who advance the view that the remedies were far-reaching and that their alleged failure demonstrates the weakness of the liability claim. This study evaluates these claims by examining the variety of remedies that were finally imposed in the European Microsoft cases, from a comparative perspective. The study begins with a discussion of the roots of the Microsoft issues in Europe and the consequent choice of a remedial approach by the Commission and the Court. It then explores the effectiveness of the remedies in achieving the aims that were set. The non-consideration of the structural remedy in the European case and the pros and cons of developing such a remedy in the future are briefly discussed before more emphasis is put on alternative remedies (competition and non-competition law ones) that have been suggested in the literature. The study concludes by discussing the fit between the remedy and the theory of consumer harm that led to the finding of liability and questions a total dissociation between the two. We believe that it is important to think seriously about potential remedies before litigation begins. However, we do not require an ex ante identification of an appropriate remedy by the plaintiffs, since this could lead to underenforcement or overenforcement. |
| Keywords: | antitrust, remedies, Microsoft, complementarity, innovation, efficiency, monopoly, oligopoly, media player, interoperability, Internet browser |
| JEL: | K21 L41 L42 L12 L86 L63 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0905&r=mic |
| By: | Vladimir A. Karamychev (Erasmus University Rotterdam); Peran van Reeven (Erasmus University Rotterdam) |
| Abstract: | A monopolist in public transport may oversupply frequency relative to the social optimum, as van Reeven (2008) demonstrates with homogeneous consumers. This result generalizes for heterogeneous consumers who know the timetable. Whether a monopolist oversupplies or undersupplies frequency depends on the degree of consumers’ heterogeneity as reflected in the distribution of consumers’ reservation prices. Oversupply is likely to occur when this distribution is peaked, and undersupply is likely to occur when this distribution is rather flat. In particular, monopoly production results in the oversupply of frequency when consumers’ reservation prices are concentrated around the entry costs of the private car, being the main alternative to public transport. |
| Keywords: | Frequency oversupply; Mohring effect; transportation monopolist |
| JEL: | D42 L12 L91 |
| Date: | 2009–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090077&r=mic |
| By: | Thomas Jensen (Department of Economics, University of Copenhagen) |
| Abstract: | In this paper we study the functioning of representative democracy when politicians are better informed than the electorate about conditions relevant for policy choice. We consider a model with two states of the world. The distribution of voters' preferred policies shifts with the state. The two candidates are both completely office-motivated but differ in state-dependent quality. Voters have some information about the state but candidates are better informed. If voters' information is unknown to the candidates when they take positions and sufficiently accurate then candidates will, in refined equilibrium, reveal their information by converging to the most likely median. If voters' information is not sufficiently accurate then there is polarization and the candidates'information is not revealed to the voters. We also show that if voters'information is known to the candidates then they will never reveal their information to the voters. The candidates will either pander by converging on the median that is most likely given only the voters'information or be polarized. With respect to welfare, if voters are well informed then they all prefer that their information is unknown to the candidates. However, if voters are not well informed then it is the other way around, all voters prefer that their information is known by the candidates. |
| Keywords: | electoral competition; uncertainty; information; candidate quality |
| JEL: | D72 D82 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:09-06&r=mic |
| By: | David M. Cutler; Ellen Meara; Seth Richards |
| Abstract: | We develop a model of induced innovation where research effort is a function of the death rate, and thus the potential to reduce deaths in the population. We also consider potential social consequences that arise from this form of induced innovation based on differences in disease prevalence across population subgroups (i.e. race). Our model yields three empirical predictions. First, initial death rates and subsequent research effort should be positively correlated. Second, research effort should be associated with more rapid mortality declines. Third, as a byproduct of targeting the most common conditions in the population as a whole, induced innovation leads to growth in mortality disparities between minority and majority groups. Using information on infant deaths in the U.S. between 1983 and 1998, we find support for all three empirical predictions. We estimate that induced innovation predicts about 20 percent of declines in infant mortality over this period. At the same time, innovation that occurred in response to the most common causes of death favored the majority racial group in the U.S., whites. We estimate that induced innovation contributed about one third of the rise in the black-white infant mortality ratio during our period of study. |
| JEL: | I1 I12 J1 J15 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15316&r=mic |
| By: | Sushil Bikhchandani (UCLA); Uzi Segal (Boston College) |
| Abstract: | Preferences may arise from regret, i.e., from comparisons with alternatives forgone by the decision maker. We ask whether regret-based behavior is consistent with non-expected utility theories of transitive choice. We show that the answer is no. If choices are governed by ex ante regret and elation then non-expected utility preferences must be intransitive. |
| Keywords: | transitivity, regret |
| Date: | 2009–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:711&r=mic |
| By: | KAI, Hisako |
| Abstract: | While the theoretical literature has found that intense competition leads to the poorest borrowers dropping out of the microfinance market, we do not possess sufficient research accumulated for empirical analysis in this field. This paper examines the empirical relationship between competition and wide outreach—which measures how poor-borrower microfinance institutions (MFIs) provide loans—and its accompanying effect, the impact of competition on financial self-sufficiency (FSS), using abundant financial data for socially-motivated MFIs between 2003 and 2006. We provide the first detailed econometric analysis in this regard focusing on socially-motivated MFIs in developing countries around the world. This paper finds that intense competition worsens the wide outreach, showing that the poorest borrowers are dropped from the microfinance lending portfolio. Moreover, the empirical result indicates that the adverse effect of competition on wide outreach declines as MFIs gain experience. Furthermore, this paper confirms that competition does not worsen financial self-sufficiency (FSS) and hence does not raise subsidy dependence. |
| Keywords: | Competition; Wide Outreach; Microfinance Institutions |
| JEL: | O10 |
| Date: | 2009–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17143&r=mic |
| By: | Yannis Bakos (Stern School of Business, New York University); Florencia Marotta-Wurgler (School of Law, New York University); David R. Trossen (Boalt School of Law, University of California at Berkeley) |
| Abstract: | A cornerstone of the law and economics approach to standard form contracts is the Òinformed minorityÓ hypothesis: in competitive markets, a minority of term-conscious buyers is enough to discipline sellers from offering unfavorable boilerplate terms. The informed minority argument is widely invoked to limit intervention in consumer transactions, but there has been little empirical investigation of its validity. We track the Internet browsing behavior of 45,091 households with respect to 66 online software companies to study the extent to which potential buyers access the standard form contract associated with software purchases, the end user license agreement. We find that only one or two out of every thousand retail software shoppers chooses to access the license agreement, and those that do spend too little time, on average, to have read more than a small portion of the license text. The results cast doubt on the relevance of the informed minority mechanism in a specific market where it has been invoked by both theorists and courts and, to the extent that comparison shopping online is relatively cheap and easy, suggest limits to the mechanism more generally. |
| Keywords: | online contracts, clickwrap, informed minority, ecommerce law, contracts law, standard form contracts |
| JEL: | D83 K12 L14 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0904&r=mic |
| By: | Robert J. Aumann |
| Abstract: | "Game Engineering" deals with the application of game theoretic methods to interactive situations or systems in which the rules are well defined, or where the designer can himself specify the rules. This talk, which addressed a business-school audience with no specific knowledge of game theory, describes five examples of game engineering: two dealing with auctions, two with traffic systems, and one with arbitration. At the end of the talk there was a Q & A session, which, too, is recorded here. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp518&r=mic |
| By: | Stuart M. Shieber |
| Abstract: | Open access journal publishing is currently at a systematic disadvantage relative to the traditional subscription-based journal publishing. A simple, cost effective remedy to this inequity is proposed that would put open access publishing on a path to become a sustainable, efficient system, allowing the two journal publishing systems to compete on a more level playing field. |
| Keywords: | journal, publishing, open access journal, sustainable, health care, industry, health care industry, inequity, infrastructure, business model, consumers, readers, insurance |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2196&r=mic |
| By: | Kai Christoffel; James Costain; Gregory de Walque; Keith Kuester; Tobias Linzert; Stephen Millard; Olivier Pierrard |
| Abstract: | This paper reviews recent approaches to modeling the labour market and assesses their implications for inflation dynamics through both their effect on marginal cost and on price-setting behavior. In a search and matching environment, we consider the following modeling setups: right-to-manage bargaining vs. efficient bargaining, wage stickiness in new and existing matches, interactions at the firm level between price and wage-setting, alternative forms of hiring frictions, search on-the-job and endogenous job separation. We find that most specifications imply too little real rigidity and, so, too volatile inflation. Models with wage stickiness and right-to-manage bargaining or with firm-specific labour emerge as the most promising candidates. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etudes_38&r=mic |
| By: | Baldursson, Fridrik M. (Reykjavik University); von der Fehr, Nils-Henrik M. (Dept. of Economics, University of Oslo) |
| Abstract: | We consider an industry with firms that produce a final good emitting pollution to different degree as a side effect. Pollution is regulated by a tradable quota system where some quotas may have been allocated at the outset, i.e. before the quota market is opened. We study how volatility in quota price affects firm behaviour, taking into account the impact of quota price on final-good price. The impact on the individual firm differs depending on how polluting it is - whether it is ‘clean’ or ‘dirty’- and whether it has been allocated quotas at the outset. In the absence of long-term or forward contracting, the optimal initial quota allocation turns out to resemble a grandfathering regime: clean firms are allocated no quotas - dirty firms are allocated quotas for a part of their emissions.With forward contracts and in the absence of wealth effects initial quota allocation has no effect on firm behaviour. |
| Keywords: | regulation; effluent taxes; tradable quotas; uncertainty; risk aversion; environmental management |
| JEL: | D81 H23 L51 Q28 Q38 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2009_011&r=mic |
| By: | Josse Delfgaauw (Erasmus University Rotterdam); Robert Dur (Erasmus Universiteit Rotterdam); Joeri Sol (Erasmus University Rotterdam); Willem Verbeke (Erasmus University Rotterdam) |
| Abstract: | We ran a field experiment in a Dutch retail chain consisting of 128 stores. In a random sample of these stores, we introduced short-term sales competitions among subsets of stores. We find that sales competitions have a large effect on sales growth, but only in stores where the store's manager and a large fraction of the employees have the same gender. Remarkably, results are alike for sales competitions with and without monetary rewards, suggesting a high symbolic value of winning a tournament. Lastly, despite the substantial variation in team size, we find no evidence for free-riding. |
| Keywords: | field experiment; gender differences; competition; sales contests; awards |
| JEL: | C93 J16 M52 |
| Date: | 2009–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090069&r=mic |
| By: | Stallen, M.; Smidts, A.; Rijpkema, M.; Smit, G.; Klucharev, V.; Fernandez, G. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Celebrity endorsement is omnipresent. However, despite its prevalence, it is unclear why celebrities are more persuasive than (equally attractive) non-famous endorsers. The present study investigates which processes underlie the effect of fame on product memory and purchase intention by the use of functional magnetic resonance imaging methods. We find an increase in activity in the medial orbitofrontal cortex (mOFC) underlying the processing of celebrity-product pairings. This finding suggests that the effectiveness of celebrities stems from a transfer of positive affect from celebrity to product. Additional neuroimaging results indicate that this positive affect is elicited by the spontaneous retrieval of explicit memories associated with the celebrity endorser. Also, we demonstrate that neither the activation of implicit memories of earlier exposures nor an increase in attentional processing is essential for a celebrity advertisement to be effective. By explaining the neural mechanism of fame, our results illustrate how neuroscience may contribute to a better understanding of consumer behavior. |
| Keywords: | celebrity endorsement;persuasion;medial orbital frontal cortex;affect transfer;neuromarketing;neuroeconomics |
| Date: | 2009–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765016583&r=mic |
| By: | Lonjid, Iveel |
| Abstract: | I test some special days’ effects on the stock market daily returns. These special days are: previous day three or more times up or down in a row, the first day of the month and the last day of the month, options expiration Friday, and Monday after and before options expiration day. I am using stochastic dominance test following Levy (2006) stochastic dominance algorithms, comparing pairwise those special days with each other and with all other ordinary days. To compare the results with dominance approach, I use Wald test and two sided t-test. The main idea behind these special days’ effects is that even though stock market itself has neither a memory nor certain patterns, the human emotions, thus human reaction in the form of stock market decisions relating to those special days in general remains similar over time. I apply stochastic dominance test on major US, UK and Japanese stock market indexes. I find that: - Daily stock market returns after three or more down days in a row stochastically dominate daily returns after three or more up days in a row, - First and last trading days of the month stochastically dominate other days of the month, - Monday before options expiration Friday stochastically dominates all other Mondays, and all other Mondays stochastically dominate Monday after options expirations Friday, and since stochastic dominance is transitive, Monday before options expiration day stochastically dominates Monday after options expiration day, - Options expiration Friday is stochastically dominated by all other Fridays, the first Friday of the month stochastically dominates the fifth Friday of the month, and the fifth Friday of the month stochastically dominates all other Fridays except the first Friday, and again, by transitivity, the first Friday of the month stochastically dominates all other Fridays. The above mentioned stochastic dominances are very general conclusions, as I found mostly second degrees of stochastic dominance, and those dominances are very similar in DJIA, NASDAQ 100, NASDAQ Composite, S&P 500 indexes, and somewhat different in Nikkei 225 and Russell 2000, which I mainly contribute to trading time differences. |
| Keywords: | Market Efficiency; Stock Market; Stocks Predictability; Financial Markets |
| JEL: | F37 G14 G11 C53 E27 C12 E47 |
| Date: | 2009–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17141&r=mic |
| By: | Johannes Horner (Cowles Foundation, Yale University); Larry Samuelson (Cowles Foundation, Yale University) |
| Abstract: | We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The agent's actions are hidden, and the principal, who makes the offers, cannot commit to future actions. We identify the unique Markovian equilibrium (whose structure depends on the parameters) and characterize the set of all equilibrium payoffs, uncovering a collection of non-Markovian equilibria that can Pareto dominate and reverse the qualitative properties of the Markovian equilibrium. The prospect of lucrative continuation payoffs makes it more expensive for the principal to incentivize the agent, giving rise to a dynamic agency cost. As a result, constrained efficient equilibrium outcomes call for nonstationary outcomes that front-load the agent's effort and that either attenuate or terminate the relationship inefficiently early. |
| Keywords: | Experimentation, Learning, Agency, Dynamic agency, Venture Capital, Repeated principal-agent problem |
| JEL: | D8 L2 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1726&r=mic |
| By: | Hjalmarsson, Randi (Univerisity of Maryland); Lindquist, Matthew (Dept. of Economics, Stockholm University) |
| Abstract: | This paper studies intergenerational correlations in drunk driving between fathers and their children using the Stockholm Birth Cohort. We find strong evidence of an intergenerational drunk driving relationship. Cohort members who have fathers with a drunk driving record have 2.59 times higher odds of having a drunk driving conviction themselves than cohort members with non-drunk driving fathers. We then go on to investigate the underlying mechanisms that give rise to these correlations. The results provide compelling evidence that at least some of this relationship represents a behavior-specific transference from fathers to their children. Specifically, much of the raw father-child drunk driving relationship persists over and above controls for a number of potential explanations, including that the relationship is: (i) a by-product of parental alcoholism, (ii) symptomatic of a general pattern of non-law abiding behavior, (iii) attributable to inherited ability and physical characteristics, and (iv) accounted for by common background variables or social factors. We then go on to show how this mechanism may change over time. As cohort members age into adulthood, the father-child drunk driving relationship appears to be driven by a more general behavioral transference mechanism and can be accounted for by parental alcoholism and non-law abiding behavior. |
| Keywords: | alcohol; crime; drunk driving; illegal behavior; intergenerational crime; intergenerational mobility; risky behavior |
| JEL: | J62 K42 |
| Date: | 2009–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2009_0016&r=mic |
| By: | Peter J. Lambert (University of Oregon) |
| Abstract: | A widely accepted criterion for pro-poorness of an income growth pattern is that it should reduce a (chosen) measure of poverty by more than if all incomes were growing equiproportionately. Inequality reduction is not generally seen as either necessary or sufficient for pro-poorness. Because empirical income distributions fit well to the lognormal form, lognormality has sometimes been assumed in order to determine analytically the poverty effects of income growth. We show that in a lognormal world, growth is pro-poor in the above sense if and only if it is inequality-reducing. It follows that lognormality may not be a good paradigm by means of which to examine pro-poorness issues. |
| Keywords: | poverty, growth, pro-poorness, lognormal distribution |
| JEL: | I32 D63 D31 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2009-130&r=mic |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, LIP6 - Laboratoire d'Informatique de Paris 6 - CNRS : UMR7606 - Université Pierre et Marie Curie - Paris VI); Agnieszka Rusinowska (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines) |
| Abstract: | In this paper, we study a model of influence in a social network. It is assumed that each player has an inclination to say YES or NO which, due to influence of other players, may be different from the decision of the player. The point of departure here is the concept of the Hoede-Bakker index—the notion which computes the overall decisional ‘power' of a player in a social network. The main drawback of the Hoede-Bakker index is that it hides the actual role of the influence function, analyzing only the final decision in terms of success and failure. In this paper, we separate the influence part from the group decision part, and focus on the description and analysis of the influence part. We propose among other descriptive tools a definition of a (weighted) influence index of a coalition upon an individual. Moreover, we consider different influence functions representative of commonly encountered situations. Finally, we propose a suitable definition of a modified decisional power. |
| Keywords: | Influence function ; Influence index ; Decisional power ; Social network |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00308741_v1&r=mic |
| By: | Manescu, Cristiana (Center for Finance, School of Business, Economics and Law, University of Gothenburg) |
| Abstract: | Using detailed data on corporate social responsibility (CSR) for a long panel of large publicly traded U.S. firms during July 1992-June 2008, this study investigates whether an overall measure of CSR, aggregated over seven dimensions (community, corporate governance, diversity, employee relations, environment, human rights, and product safety), can explain variation in stock returns, using Fama and MacBeth (1973) month-by-month cross-sectional regressions approach. Risk- factor analysis indicates a shift in the effect of CSR, with a positive effect on stock returns during July 1992 - June 2003, and a negative effect during July 2003 - June 2008. These results are robust even after controlling for ten industry-specific effects. Analysis on the disaggregated CSR measures reveals that it is only the Community and Employee Relations dimensions generating the positive e ect of CSR on stock returns during 1992-2003. The negative effect during 2003-2008 was mainly generated by the Human Rights, Product Safety, and Employee Relations dimensions. This constitutes evidence that these three CSR dimensions function as risk factors.<p> |
| Keywords: | responsible investments; market efficiency; three factor model; risk premium |
| JEL: | G12 G14 M14 |
| Date: | 2009–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0376&r=mic |
| By: | Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis); Pierre Garrouste (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper is organized as follows : First we show that the reference to the notion of group selection is coherent with the other parts of Hayek's thought. Second we develop the idea that recent works in terms of the emergence and evolution of social norms corroborate in part Hayek's theses in this domain. Finally we put to the fore some drawbacks in Hayek's approach and propose means to solve them. |
| Keywords: | Hayek ; social norms ; emergence and evolution ; coherence ; relevance |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00346389_v1&r=mic |
| By: | Olivier Pierrard; Henri R. Sneessens |
| Abstract: | We build on the DSGE literature to propose an overlapping generation model for Luxembourg.By way of illustration, the model is then used to study the consequences of the ageing of the population and the potential effects of alternative macroeconomic policies. |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etudes_36&r=mic |
| By: | Pablo Brañas-Garza (Universidad de Granada); Juan C. Cárdenas (Universidad de los Andes); Máximo Rossi (Universidad de la República, Uruguay) |
| Abstract: | There is not general consensus about if women are more or less generous than men. Although the number of papers supporting more generous females is a bit larger than the opposed it is not possible to establish any definitive and systematic gender bias. This paper provides new evidence on this topic using a unique experimental dataset. We used data from a field experiment conducted under identical conditions (and monetary payoffs) in 6 Latin American cities, Bogotá, Buenos Aires, Caracas, Lima, Montevideo and San José. Our dataset amounted to 3,107 experimental subjects who played the Trust Game. We will analyze the determinants of behavior of second movers, that is, what determines reciprocal generosity. In sharp contrast to previous papers we found that males are more generous than females. In the light of this result, we carried out a systematic analysis of individual features (income, education, age, etc.) for females and males separately. We found differential motivations for women and men. Third, we see that (individual) education enhances pro-social behavior. Lastly, we see that subjects’ expectations are crucial. |
| Keywords: | Reciprocal altruism, gender, education |
| JEL: | C93 D64 J16 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2009-128&r=mic |
| By: | Todd E. Clark; Michael W. McCracken |
| Abstract: | This paper develops bootstrap methods for testing whether, in a finite sample, competing out-of-sample forecasts from nested models are equally accurate. Most prior work on forecast tests for nested models has focused on a null hypothesis of equal accuracy in population basically, whether coefficients on the extra variables in the larger, nesting model are zero. We instead use an asymptotic approximation that treats the coefficients as non-zero but small, such that, in a finite sample, forecasts from the small model are expected to be as accurate as forecasts from the large model. Under that approximation, we derive the limiting distributions of pairwise tests of equal mean square error, and develop bootstrap methods for estimating critical values. Monte Carlo experiments show that our proposed procedures have good size and power properties for the null of equal finite-sample forecast accuracy. We illustrate the use of the procedures with applications to forecasting stock returns and inflation. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp09-11&r=mic |