|
on Microeconomics |
| By: | Armstrong, Mark; Huck, Steffen |
| Abstract: | We discuss the literatures on behavioral economics, bounded rationality and experimental economics as they apply to firm behavior in markets. Topics discussed include the impact of imitative and satisficing behavior by firms, outcomes when managers care about their position relative to peers, the benefits of employing managers whose objective diverges from profit-maximization (including managers who are overconfident or base pricing decisions on sunk costs), the impact of social preferences on the ability to collude, and the incentive for profit-maximizing firms to mimic irrational behavior. |
| Keywords: | Behavioral economics; bounded rationality; experimental economics; oligopoly; antitrust |
| JEL: | D21 C92 D43 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20356&r=mic |
| By: | Helene LATZER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | Our paper presents a new rationale for innovation by incumbents. We show that the possibility to price-discriminate between consumers having different levels of wealth is a sufficient incentive for the industry leader to overcome the Arrow (1962) effect and keep investing in R&D, even in the absence of any incumbent advantage in the R&D field. We model an economy composed of two distinct groups of consumers, differing in their wealth endowment and subject to non-homothetic preferences, obtained through unit consumption of the quality good. We demonstrate that in such a framework, there exists a unique steady state equilibrium with positive innovation rates of both incumbents and challengers. Beyond its novelty, this result then also allows us to analyze the effect of the extent of income inequalities on both the challenger and incumbent innovation rates, and by extension on the economic growth rate. We demonstrate that a higher share of the population being poor is detrimental to the rate of economic growth, while a redistribution of wealth from rich to poor consumers increases the challenger innovation rate and has ambiguous effects on the incumbentÕs investment in R&D. |
| Keywords: | Growth, Innovation, Income inequalities. |
| JEL: | O3 O4 F4 |
| Date: | 2009–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2010002&r=mic |
| By: | Alison Booth; Andrew Leigh |
| Abstract: | We test for gender discrimination by sending fake CVs to apply for entry-level jobs. Female candidates are more likely to receive a callback, with the difference being largest in occupations that are more female-dominated. |
| Keywords: | discrimination, field experiments, employment, gender |
| JEL: | J71 C93 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:632&r=mic |
| By: | Jeroen de Jong; Mark Freel |
| Abstract: | This paper explores the geographical distance of innovation collaborations in high tech small firms. We test if absorptive capacity is a key determinant. Drawing on survey data from a sample of 316 Dutch high-tech small firms, engaging in 1.245 collaborations, we find most partners to be ‘local’. However, controlling for a variety of potential influences, higher R&D expenditure is positively related to collaboration with more distant organisations. |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201008&r=mic |
| By: | Andersson, Mats (Swedish National Road and Transport Research Institute) |
| Abstract: | We analyse maintenance cost data for Swedish railway infrastructure in relation to traffic volumes and network characteristics, and separate the cost impact from passenger and freight trains. Lines with mixed passenger and freight traffic, and dedicated freight lines are analysed separately using both log-linear and Box-Cox regression models. We find that for mixed lines, the Box-Cox specification is preferred, while a log-linear model is chosen in the case of dedicated freight lines. The cost elasticity with respect to output is found to be higher for passenger trains than for freight trains. From a marginal cost pricing perspective, freight trains are currently over-charged, while passenger trains are under-charged. |
| Keywords: | Railway; Maintenance; Box-Cox; Marginal Cost |
| JEL: | C31 L92 |
| Date: | 2009–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vtiwps:2010_005&r=mic |
| By: | Carree, Martin A. (Maastricht University) |
| URL: | http://d.repec.org/n?u=RePEc:ner:maastr:urn:nbn:nl:ui:27-15504&r=mic |
| By: | Ernest Miguelez (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | TWe investigate the importance of the labour mobility of inventors, as well as the scale, extent and density of their collaborative research networks, for regional innovation outcomes. To do so, we apply a knowledge production function framework at the regional level and include inventors’ networks and their labour mobility as regressors. Our empirical approach takes full account of spatial interactions by estimating a spatial lag model together, where necessary, with a spatial error model. In addition, standard errors are calculated using spatial heteroskedasticity and autocorrelation consistent estimators to ensure their robustness in the presence of spatial error autocorrelation and heteroskedasticity of unknown form. Our results point to the existence of a robust positive correlation between intra-regional labour mobility and regional innovation, whilst the relationship with networks is less clear. However, networking across regions positively correlates with a region’s innovation intensity. |
| Keywords: | Speed Limits; inventors’ mobility, networks of co-inventors, knowledge production function, spatial econometrics, European regions |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201001&r=mic |
| By: | Mario R. Partidário |
| Abstract: | This paper addresses the advocacy role that SEA can strategically play towards more sustainable and environmental decision-making and how this can be achieved. It discusses the required conditions for this performance and also the frustrations of SEA when such conditions are absent or insufficient. The paper shares the experience with the case of an SEA on the strategic decision on the location of the new international airport in Lisbon, particularly with respect to how SEA made a difference to infrastructure development decisions and the conditions that were met to make it possible. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/31-en&r=mic |
| By: | Xiaoji Lin |
| Abstract: | We study technology adoption, risk and expected returns using a dynamic equilibrium model with production. The central insight is that optimal technology adoption is an important driving force of the cross section of stock returns. The model predicts that technology adopting firms are less risky than non-adopting firms. Intuitively, by preventing firms from freely upgrading existing capital to the technology frontier, costly technology adoption reduces the flexibility of firms in smoothing dividends, and hence generates the risk dispersion between technology adopting firms and non-adopting firms. The model explains qualitatively and in many cases quantitatively empirical regularities: (i) The positive relation between firm age and stock returns; (ii) firms with high investment on average are younger and earn lower returns than firms with low investment; and (iii) growth firms on average are younger than value firms, and the value premium is increasing in firm age. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp645&r=mic |
| By: | Brezis, Elise S. |
| Abstract: | The aim of this paper is to examine the evolution of recruitment of elites due to globalization. In the last century, the main change that occurred in the way the Western world trained its elites is that meritocracy became the basis for their recruitment. Although meritocratic selection should result in the best being chosen, we show that meritocratic recruitment may actually lead to class stratification and auto-recruitment. In this paper, I show that due to globalization, the stratification effect will be even stronger. Globalization will bring about the formation of an international technocratic elite with its own culture, norms, ethos, and identity, as well as its private clubs like the Davos World Economic Forum. We face the emergence of a transnational oligarchy. |
| Keywords: | globalization, education, elites, meritocracy, recruitment, social mobility |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-05&r=mic |
| By: | Diaz-Serrano, Luis (Universitat Rovira i Virgili) |
| Abstract: | The precondition for labour-market competition between immigrants and natives is that both are willing to accept jobs that do not differ in quality. To test this hypothesis, in this paper we compare the working conditions between immigrants and natives in Catalonia. Comparing immigrants' working conditions in relation to their native counterparts is not only a useful analysis for studying the extent to which immigrants and low-skilled native workers are direct competitors in the labour market, but also allows us to contribute to the literature on this issue by moving away from the conventional approach used in previous studies. Our results indicate that: i) natives and immigrants display a different taste for job (dis)amenities; ii) Catalan-born workers might be in direct competition with EU15 immigrants, while non-Catalan Spanish workers might be competing with Latin American immigrants, and; iii) African-born immigrants are the group in the Catalan workforce that by far face the worst working conditions. |
| Keywords: | job quality, working conditions, immigration, job satisfaction |
| JEL: | J28 J61 J81 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4693&r=mic |
| By: | Marc Fleurbaey; John Roemer |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cla:najeco:814577000000000442&r=mic |
| By: | Didier Rullière (SAF - Laboratoire de Sciences Actuarielle et Financière - Université Claude Bernard - Lyon I : EA2429); Diana Dorobantu (SAF - Laboratoire de Sciences Actuarielle et Financière - Université Claude Bernard - Lyon I : EA2429); Areski Cousin (SAF - Laboratoire de Sciences Actuarielle et Financière - Université Claude Bernard - Lyon I : EA2429) |
| Abstract: | The present paper provides a multi-period contagion model in the credit risk field. Our model is an extension of Davis and Lo's infectious default model. We consider an economy of n firms which may default directly or may be infected by other defaulting firms (a domino effect being also possible). The spontaneous default without external influence and the infections are described by not necessarily independent Bernoulli-type random variables. Moreover, several contaminations could be required to infect another firm. In this paper we compute the probability distribution function of the total number of defaults in a dependency context. We also give a simple recursive algorithm to compute this distribution in an exchangeability context. Numerical applications illustrate the impact of exchangeability among direct defaults and among contaminations, on different indicators calculated from the law of the total number of defaults. We then examine the calibration of the model on iTraxx data before and during the crisis. The dynamic feature together with the contagion effect seem to have a significant impact on the model performance, especially during the recent distressed period. |
| Keywords: | credit risk; contagion model; dependent defaults; default distribution; exchangeability; CDO tranches |
| Date: | 2009–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00374367_v2&r=mic |
| By: | Reiner, Christian (University of Salzburg) |
| Abstract: | This article focuses on the role of Technology Transfer Offices (TTOs) in regional development in three Austrian regions that represent different types of regional economies. TTOs can be defined as “bridging institutions” between academia and business. The value added by this approach emerges due to empirical results demonstrating that the variety of TTO functions and their respective spatial-profile of activities depend heavily on the regional context. Regional economic structure and regional policy systematically shape the spatial profile of TTO activities. The distinction between active and passive TTOs emerged as an important one regarding their potential regional economic development impact. While passive TTOs merely facilitate already existing contacts of the academic staff, active TTOs generate new university-industry linkages. These additionally created contacts are heavily biased towards the regional level. Intellectual property rights (IPR)-related TTO activities show a rather weak regional impact. This might prove problematic for policy makers that foster the patent-oriented commercialization of knowledge as a means to intensify knowledge spillovers from the universities to regional or national firms. |
| Keywords: | Universities; Technology transfer offices; regional innovation systems; regional policy; Austria |
| JEL: | I23 I28 O33 O34 R11 R58 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2010_005&r=mic |
| By: | Facundo Albornoz; Antonio Cabrales |
| Abstract: | We study the dynamic support for fiscal decentralization in a political agency model from the perspective of a region. We show that corruption opportunities are lower under centralization at each period of time. However, centralization makes more difficult for citizens to detect corrupt incumbents. Thus, corruption is easier under centralization for low levels of political competition. We show that the relative advantage of centralization depends negatively on the quality of the local political class, but it is greater if the center and the region are subject to similar government productivity shocks. When we endogenize the quality of local politicians, we establish a positive link between the development of the private sector and the support for decentralization. Since political support to centralization evolves over time, driven either by economic/political development or by exogenous changes in preferences over public good consumption, it is possible that voters are (rationally) discontent about it. Also, preferences of voters and the politicians about centralization can diverge when political competition is weak. |
| Keywords: | Decentralization, Centralization, Political agency, Quality of politicians, Corruption |
| JEL: | H11 D72 D73 P16 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we100402&r=mic |
| By: | Per Kageson |
| Abstract: | Many governments in different parts of the world are investing in high speed rail. Some of them do so thinking that it will be an important part of climate change mitigation. Intercity traffic over medium distances is particularly interesting in the environmental context as it constitutes the only transport segment where aircraft, trains, coaches and cars naturally compete for market shares. This report calculates the effect on emissions from building a new high speed link that connects two major cities located 500 km apart. It assumes that emissions from new vehicles and aircraft in 2025 can be used as a proxy for the emissions during a 50 year investment depreciation period. The emissions from the marginal production of electricity, used by rail and electric vehicles, are estimated to amount on average to 530 gram per kWh for the entire period. Fuels used by road vehicles are assumed to be on average 80 percent fossil and 20 per cent renewable (with a 65% carbon efficiency in the latter case). |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/28-en&r=mic |
| By: | Yakov Babichenko |
| Abstract: | A completely uncoupled dynamic is a repeated play of a game, where each period every player knows only his action set and the history of his own past actions and payoffs. One main result is that there exist no completely uncoupled dynamics with finite memory that lead to pure Nash equilibria (PNE) in almost all games possessing pure Nash equilibria. By "leading to PNE" we mean that the frequency of time periods at which some PNE is played converges to 1 almost surely. Another main result is that this is not the case when PNE is replaced by "Nash epsilon-equilibria": we exhibit a completely uncoupled dynamic with finite memory such that from some time on a Nash epsion-equilibrium is played almost surely. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp529&r=mic |
| By: | Rolf Aaberge (Research Department, Statistics Norway); Magne Mogstad (Research Department, Statistics Norway); Vito Peragine (University of Bari) |
| Abstract: | In this paper, we introduce and apply a general framework for evaluating long-term income distributions according to the Equality of Opportunity principle. Our framework allows for both an exante and an ex-post approach to EOp. Our ex-post approach relies on a permanent income measure defined as the minimum annual expenditure an individual would need in order to be as well off as he could be by undertaking inter-period income transfers. There is long-term ex-post inequality of opportunity if individuals who exert the same effort have different permanent incomes. In comparison, the ex-ante approach focuses on the expected permanent income for individuals with identical circumstances. Hence, the ex-ante approach pays attention to inequalities in expected permanent income between different types of individuals. To demonstrate the empirical relevance of a long-run perspective on EOp, we exploit a unique panel data from Norway on individuals’ incomes over their working lifespan. |
| Keywords: | equality of opportunity, social welfare, inequality, permanent income, intertemporal choice, ex-ante, ex-post. |
| JEL: | D71 D91 I32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2010-158&r=mic |
| By: | Sergiu Hart |
| Abstract: | Stochastic dominance is a partial order on risky assets (“gamblesâ€) that is based on the uniform preference, of all decision-makers (in an appropriate class), for one gamble over another. We modify this, first, by taking into account the status quo (given by the current wealth) and the possibility of rejecting gambles, and second, by comparing rejections that are substantive (that is, uniform over wealth levels or over utilities). This yields two new stochastic orders: wealth-uniform dominance and utility-uniform dominance. Unlike stochastic dominance, these two orders are complete: any two gambles can be compared. Moreover, they are equivalent to the orders induced by, respectively, the Aumann–Serrano (2008) index of riskiness and the Foster–Hart (2009a) measure of riskiness. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp531&r=mic |