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on Microeconomics |
| By: | Marco Pagnozzi (University of Napoli "Federico II" and CSEF); Salvatore Piccolo (University of Naples "Federico II" and CSEF) |
| Abstract: | We consider a manufacturer's incentive to sell through an independent retailer, rather than directly to final consumers, when contracts with retailers cannot be observed by competitors. If retailers conjecture that identical competing manufacturers always offer identical contracts (symmetry beliefs), vertical separation by all manufacturers is an equilibrium, and it results in higher consumers' prices and manufacturers' profits. Even with private contracts, vertically separated manufacturers reduce competition by inducing less aggressive behaviour by retailers in the final market. We characterize a condition for manufacturers' profits to be higher with private than with public contracts. Our results hold both with price and with quantity competition, and do not hinge on retailers' beliefs being perfectly symmetric. |
| Keywords: | Delegation, vertical separation, private contracts, symmetry beliefs |
| JEL: | D20 D43 |
| Date: | 2010–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:251&r=mic |
| By: | Bouguezzi, Fehmi |
| Abstract: | This paper compares three licensing regimes in a symmetric duopoly model situated on a circular city à la Salop. One of the firms holds a patent allowing to reduce the marginal production cost and decides to license its innovation under a fixed fee or a royalty regimes or not to license. The paper shows that fixed fee licensing is better than no licensing for a non drastic innovation which contradicts the result found by Poddar and Sinha (2004) in a linear model. Results also show that, for a non drastic innovation, fixed fee licensing is better than royalty licensing and the opposite for a drastic innovation. Finally, I show that optimal licensing regime for the patent holding firm when innovation is not drastic is fixed fee and I show that for this licensing regime a Nash equilibrium exists. When innovation is drastic, patent holding firm do not license and become a monopoly. |
| Keywords: | Salop model; Technology transfer; Patent licensing |
| JEL: | O32 O31 C21 L24 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22417&r=mic |
| By: | Monteiro, Natália Pimenta (University of Minho); Portela, Miguel (University of Minho); Straume, Odd Rune (University of Minho) |
| Abstract: | We analyse – theoretically and empirically – how private versus public ownership of firms affects the degree of rent sharing between firms and their workers. Using a particularly rich linked employer-employee dataset from Portugal, covering a large number of corporate ownership changes across a wide spectrum of economic sectors over more than 20 years, we find a positive relationship between private ownership and rent sharing. Based on our theoretical analysis, this result cannot be explained by private firms being more profit oriented than public ones. However, the result is consistent with privatisation leading to less job security, implying stronger efficiency wage effects. |
| Keywords: | rent sharing, private vs public ownership, panel data |
| JEL: | J45 D21 C23 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4909&r=mic |
| By: | Jocelyne Bion-Nadal; Magali Kervarec |
| Abstract: | The framework of this paper is that of uncertainty, that is when no reference probability measure is given. To every convex regular risk measure $\rho$ on ${\cal C}_b(\Omega)$, we associate a canonical $c_{\rho}$-class of probability measures. Furthermore the convex risk measure admits a dual representation in terms of a weakly relatively compact set of probability measures absolutely continuous with respect to some probability measure belonging to the canonical $c_{\rho}$-class. To get these results we study the topological properties of the dual of the Banach space $L^1(c)$ associated to some capacity $c$ and we prove a representation Theorem for convex risk measures on $L^1(c)$. As applications, we obtain that every $G$-expectation $\E$ (resp. in case of uncertain volatility every sublinear risk measure $\rho$), admits a representation with a numerable family of probability measures absolutely continuous with respect to some $P$ belonging to the canonical $c$-class, with $c(f)=\E(|f|)$, (resp. $\rho(-|f|))$. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1004.5524&r=mic |
| By: | Ghazala Azmat; Nagore Iriberri |
| Abstract: | This paper studies the effect of providing relative performance feedback information on individual performance and on individual affective response, when agents are rewarded according to their absolute performance. In a laboratory set-up, agents perform a real effort task and when receiving feedback, they are asked to rate their happiness, arousal and feeling of dominance. Control subjects learn only their absolute performance, while the treated subjects additionally learn the average performance in the session. Performance is 17 percent higher when relative performance feedback is provided. Furthermore, although feedback increases the performance independent of the content (i.e., performing above or below the average), the content is determinant for the affective response. When subjects are treated, the inequality in the happiness and the feeling of dominance between those subjects performing above and below the average increases by 8 and 6 percentage points, respectively. |
| Keywords: | relative performance, piece-rate, feedback, social comparison, happiness. |
| JEL: | I21 M52 C30 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1216&r=mic |
| By: | Ole E. Barndorff–Nielsen (Thiele Center, Department of Mathematical Sciences and CREATES); Fred Espen Benth (Centre of Mathematics for Applications, University of Oslo and Faculty of Economics University of Agder); Almut E. D. Veraart (CREATES, School of Economics and Management Aarhus University) |
| Abstract: | This paper introduces a new modelling framework for energy spot prices based on Lévy semistationary processes. Lévy semistationary processes are special cases of the general class of ambit processes. We provide a detailed analysis of the probabilistic properties of such models and we show how they are able to capture many of the stylised facts observed in energy markets. Furthermore, we derive forward prices based on our spot price model. As it turns out, many of the classical spot models can be embedded into our novel modelling framework. |
| Keywords: | Energy markets, forward price, Lévy semistationary process, stochastic integration, spot price |
| JEL: | C0 C1 C5 G1 |
| Date: | 2010–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2010-18&r=mic |
| By: | Dreger, Christian (DIW Berlin); Reimers, Hans-Eggert (Wismar University of Technology, Business and Design) |
| Abstract: | This paper provides an empirical analysis on the determination of wages at the sectoral level in main industrial economies. Nominal wages are bargained between labour unions and employers in imperfect competitive markets, where spillovers across sectors might occur. Using a principal component approach, sectoral wage growth rates are separated into common and idiosyncratic components. This defines the relative role of national and sector specific conditions in the wage determination process. The common component is highly relevant especially in continental Europe, and is more visible for manufacturing than for services sectors. It reflects national inflation and productivity growth, while labour market tightness is negligible. The weight of the macroeconomic environment has declined in recent years. Wage growth tends to be more in line with idiosyncratic conditions like sectoral productivity and prices, probably due to the ongoing globalization of markets. |
| Keywords: | sectoral wages, wage spillovers, common factors |
| JEL: | C22 C23 E24 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4908&r=mic |
| By: | Takashi Kunimoto; Roberto Serrano |
| Abstract: | Implementation in iteratively undominated strategies relies on permissive conditions. However, for the sufficiency results available, authors have relied on assumptions that amount to quasilinear preferences on a numeraire. We uncover a new necessary condition that implies that such assumptions cannot be dispensed with. We term the condition “restricted deceptionproofness.” It requires that, in environments with identical preferences, the social choice function be immune to all deceptions, making it then stronger than incentive compatibility. In some environments the conditions for (exact or approximate) implementation are more restrictive than previously thought. |
| Keywords: | mechanism design; exact and approximate implementation; iteratively undominated strategies; restricted deception-proofness; incentive compatibility; measurability |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2010-2&r=mic |
| By: | Moretti, Enrico (University of California, Berkeley) |
| Abstract: | I examine the causes and the consequences of differences in labor market outcomes across local labor markets within a country. The focus is on a long-run general equilibrium setting, where workers and firms are free to move across localities and local prices adjust to maintain the spatial equilibrium. In particular, I develop a tractable general equilibrium framework of local labor markets with heterogenous labor. This framework is useful in thinking about differences in labor market outcomes of different skill groups across locations. It clarifies how, in spatial equilibrium, localized shocks to a part of the labor market propagate to the rest of the economy through changes in employment, wages and local prices and how this diffusion affects workers' welfare. Using this framework, I address three related questions. First, I analyze the welfare consequences of productivity differences across local labor markets. I seek to understand what happens to the wage, employment and utility of workers with different skill levels when a local economy experiences a shift in the productivity of a group of workers. Second, I analyze the causes of productivity differences across local labor markets. To a large extent, productivity differences within a country are unlikely to be exogenous. I review the theoretical and empirical literature on agglomeration economies, with a particular focus on studies that are relevant for labor economists. Finally, I discuss the implications for policy. |
| Keywords: | wages, general equilibrium |
| JEL: | J00 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4905&r=mic |
| By: | Leif Brandes (Institute for Strategy and Business Economics, University of Zurich); Egon Franck (Institute for Strategy and Business Economics, University of Zurich); Philipp Theiler (Institute for Strategy and Business Economics, University of Zurich) |
| Abstract: | This paper presents estimation results on the size and loyalty of sports teams’ supporter groups in professional German football. Based on a novel two-stage estimation procedure, we find clear evidence for heterogeneity across teams. In a first stage, a random utility model for consumers is modelled and fitted to more than 1,700 matches over the seasons 1996-2001. In a second-step, attendance probabilities are predicted for the seasons 2002-2003 to estimate group sizes. A team’s group size is positively correlated with its merchandising revenues (? =0.55, p<0.02), memberships, and fan clubs. Noteworthily, no similar correlations can be found for a team’s hometown population, which has been the standard measure for market size in applied work so far. |
| Keywords: | Group size, Random utility model, Soccer, Ticket demand |
| JEL: | D12 C25 L83 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:iso:wpaper:0126&r=mic |
| By: | Philip S. Babcock; Mindy Marks |
| Abstract: | Using multiple datasets from different time periods, we document declines in academic time investment by full-time college students in the United States between 1961 and 2003. Full-time students allocated 40 hours per week toward class and studying in 1961, whereas by 2003 they were investing about 27 hours per week. Declines were extremely broad-based, and are not easily accounted for by framing effects, work or major choices, or compositional changes in students or schools. We conclude that there have been substantial changes over time in the quantity or manner of human capital production on college campuses. |
| JEL: | J22 J24 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15954&r=mic |
| By: | Rainer Schnell |
| Abstract: | Social scientists have long virtually ignored the biological constraints of human behavior. Yet if the prediction of behavior is considered essential to a social science, neglecting any variable that might influence human behavior is unacceptable. This paper provides examples of important biological variables and describes their measurement in social surveys. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:rsw:rswwps:rswwps98&r=mic |
| By: | Andreas Peichl; Nico Pestel |
| Abstract: | Closely following recent innovations in the literature on the multidimensional measurement of poverty, this paper provides similar measures for the top of the distribution using a dual cutoff method to identify individuals, who can be considered as rich in a multidimensional setting. We use this framework to analyze the role of wealth, health and education, in addition to income, as dimensions of multidimensional well-being in Germany. Our analysis shows that more than half of the German population is affluent in at least one dimension and less than 1% is affluent in all four dimensions. The likelihood of being rich in all dimensions is highest for prime-aged males from the West who live in couple households without children. Mobility between different affluence counts between 2002 and 2007 is rather low and existing changes are mostly driven by health and to a lesser extent by wealth. |
| Keywords: | Affluence, multidimensional measurement, mobility, elites |
| JEL: | D31 D63 I0 I31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp295&r=mic |
| By: | Chiswick, Carmel U. (University of Illinois at Chicago) |
| Abstract: | The role of women in the ritual of many religions changed dramatically at the end of the 20th century, to the point where full participation by women was the norm by 2000 rather than the rarity that it had been 30 years earlier. This paper considers some aspects of the economic context that help explain why the movement toward egalitarianism succeeded in that period in contrast to its many previous failures. It concludes with predictions of future trends. |
| Keywords: | economics, gender, religion, fertility |
| JEL: | J16 Z12 J13 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4904&r=mic |
| By: | Konstantin A. Kholodilin; Maximilian Podstawski; Boriss Siliverstovs |
| Abstract: | In this paper, we investigate whether the Google search activity can help in nowcasting the year-on-year growth rates of monthly US private consumption using a real-time data set. The Google-based forecasts are compared to those based on a benchmark AR(1) model and the models including the consumer surveys and financial indicators. According to the Diebold-Mariano test of equal predictive ability, the null hypothesis can be rejected suggesting that Google-based forecasts are significantly more accurate than those of the benchmark model. At the same time, the corresponding null hypothesis cannot be rejected for models with consumer surveys and financial variables. Moreover, when we apply the test of superior predictive ability (Hansen, 2005) that controls for possible data-snooping biases, we are able to reject the null hypothesis that the benchmark model is not inferior to any alternative model forecasts. Furthermore, the results of the model confidence set (MCS) procedure (Hansen et al., 2005) suggest that the autoregressive benchmark is not selected into a set of the best forecasting models. Apart from several Google-based models, the MCS contains also some models including survey-based indicators and financial variables. We conclude that Google searches do help improving the nowcasts of the private consumption in US. |
| Keywords: | Google indicators, real-time nowcasting, principal components, US private consumption |
| JEL: | C22 C53 C82 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp997&r=mic |
| By: | Mannberg, Andréa (Department of Economics, Umeå University); Sjögren, Tomas (Department of Economics, Umeå University) |
| Abstract: | Over the last half-century female employment rates have increased significantly in many countries. This change has partly been attributed to a change in gender norms. The purpose of this paper is to present a dynamic model within which the evolution of female labor supply can be analyzed. Drawing on psychological literature, we let individuals define themselves in terms of different social identities, each of which prescribes a certain type of behavior. These prescriptions may imply conflicting incentives which provide agents with a motive to continuously revise the importance they attach to a given identity. Applying this approach within the context of a dynamic model of labor supply, we are able to make some novel predictions about what may cause labor supply to change over time. Our results suggest that the fear of becoming an outsider in society may have prevented a complete transition of women from housewives to breadwinners. In addition, we show that the discrepancy between personal and social norms may have interesting implications for labor supply: an increase in the hours of work prescribed by a working norm need not necessarily lead to more hours of work. Finally, our analysis shows that not recognizing that the weights attached to different social identities are endogenous may imply that the long-run effects on labor supply of a higher wage may be underestimated. |
| Keywords: | Female Labor Supply; Social Norms |
| JEL: | J21 J22 |
| Date: | 2010–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0805&r=mic |
| By: | Yasuyuki Sawada (Department of Economics, University of Tokyo); Kazumitsu Nawata (Department of Economics, University of Tokyo); Masako Ii (Department of Economics, Hitotsubashi University); Mark J. Lee (Department of Economics, Towson University) |
| Abstract: | We investigate whether and how the credit crunch during the financial crisis in Japan affected household welfare. We estimate the consumption Euler equation with endogenous credit constraints using household panel data for 1993–1999, generating several findings. First, a small but non-negligible portion of the households faced credit constraints during the crisis, rejecting the standard consumption Euler equation. Second, the credit crunch affected household welfare negatively, albeit not seriously. The estimated welfare loss ranges between two to ten percent increases in marginal utility, depending on income level. Finally, our results corroborate that the credit crunch in Japan was supply-driven. |
| Keywords: | Credit crunch, Consumption Euler equation, Household Welfare. |
| JEL: | D91 E21 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2010-11&r=mic |
| By: | Raghuram G; Digar Rishita; Jain Chandni |
| Abstract: | In 2007-08, Indian Railways (IR) carried 6.5 billion passengers (highest in the world as a single system, and second highest in the world as a country after Japan at 9.0 billion passengers), serviced 770 billion passenger kms (second highest in the world, close to China at 773 billion passenger kms) and passenger earnings were Rs 19,783 crores. Of this, 43% of the passengers, 84% of the passenger kms and 92% earnings were from the non suburban sector. The actual passenger kms for 2007-08 was higher than the capacity of the IR. Such overuse can be reduced by increasing the coaching stock, or by improving the utilization of coaches. The former method proves to be an expensive one for IR. Hence, this calls for an improvement in the coaching stock utilization. In this paper, we assess the utilization of coaches on the parameters % of runtime, kms/day, and average speed of rakes servicing express/mails and passenger trains in the South Central Railway (SCR), taking into consideration the rake linking involved. This is done by analyzing every rake link used in the SCR as given in their rake link booklet. |
| Date: | 2009–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:wp2009-07-03&r=mic |
| By: | Werner Roeger; Janos Varga; Jan in 't Veld |
| Abstract: | This paper uses a semi-endogenous growth model to identify possible sources for three interrelated stylised differences between the EU and the US, namely a higher level of productivity and knowledge investment and larger skill premia in the US compared to the EU. The model allows us to explain these differences in terms of differences in subsidies to R and D, mark ups, administrative entry barriers and financial frictions.The paper provides a ranking about the relative importance of these factors. Goods market competition and both administrative and financial entry barriers are the most important explanatory factors for lower productivity in the EU, while entry barriers explain the bulk of the knowledge investment gap and high skilled wage premia. |
| Keywords: | productivity differences endogenous growth R and D market structure skill composition dynamic general equilibrium modelling Economic P how to close the productivity gap between the US a quantitative assessment using a semi-endogenou Varga Roeger in 't Veld European Economy. Economic Papers |
| JEL: | C51 E21 E22 E52 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0399&r=mic |
| By: | N. El Karoui (CMAP - Centre de Mathématiques Appliquées - CNRS : UMR7641 - Polytechnique - X, PMA - Laboratoire de Probabilités et Modèles Aléatoires - CNRS : UMR7599 - Université Pierre et Marie Curie - Paris VI - Université Paris-Diderot - Paris VII); Mohamed M'Rad (CMAP - Centre de Mathématiques Appliquées - CNRS : UMR7641 - Polytechnique - X) |
| Abstract: | The paper generalizes the construction by stochastic flows of consistent utilities processes introduced by M. Mrad and N. El Karoui (2010). The market is incomplete and securities are modeled as locally bounded positive semimartingales. Making minimal assumptions and convex constraints on test-portfolios, we construct by composing two stochastic flows of homeomorphisms, all the consistent stochastic utilities whose the optimal wealth process is a given admissible portfolio, strictly increasing in initial capital. Proofs are essentially based on change of variables techniques. |
| Keywords: | Consistent utilities; progressive utilities;forward utility, performance criteria, horizon-unbiased utility, consistent utility; progressive utility; portfolio optimization; optimal portfolio; duality;minimal martingal measure;Stochastic flows of homeomorphisms |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00477380_v1&r=mic |
| By: | Francq, Christian; Zakoian, Jean-Michel |
| Abstract: | This paper studies the asymptotic properties of the quasi-maximum likelihood estimator of ARCH(1) models without strict stationarity constraints, and considers applications to testing problems. The estimator is unrestricted, in the sense that the value of the intercept, which cannot be consistently estimated in the explosive case, is not fixed. A specific behavior of the estimator of the ARCH coefficient is obtained at the boundary of the stationarity region, but this estimator remains consistent and asymptotically normal in every situation. The asymptotic variance is different in the stationary and non stationary situations, but is consistently estimated, with the same estimator, in both cases. Tests of strict stationarity and non stationarity are proposed. Their behaviors are studied under the null assumption and under local alternatives. The tests developed for the ARCH(1) model are able to detect non-stationarity in more general GARCH models. A numerical illustration based on stock indices is proposed. |
| Keywords: | ARCH model; Inconsistency of estimators; Local power of tests; Nonstationarity; Quasi Maximum Likelihood Estimation |
| JEL: | C13 C12 C22 C01 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22414&r=mic |
| By: | Sergei Guriev (New Economic School (Moscow)); Anton Suvorov (New Economic School (Moscow)) |
| Abstract: | Unlike the textbook model of a top manager being an omniscient planner, coordinator and monitor, the real life managers suffer from discontinuity, lack of systematic information collection and limited time for analysis and re?ection. Why do not business leaders set up their organizations in the way that would allow themselves to make informed choices based on thorough analysis? We argue that in some situations top managers may benefit from being less informed. In our model, additional information raises ex post flexibility of the decision-makers which may undermine the ex ante incentives of their subordinates to make specific investments. The subordinates expect less informed leaders to be more committed to the original strategy which increases the returns to the strategy-specific investments. We show that this effect is more likely to take place in more predictable environments; we also discuss how this effect depends on the hierarchical structure of the organization. |
| Keywords: | leadership, commitment, organizational structure |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0142&r=mic |