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on Microeconomics |
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Issue of 2005‒11‒09
seven papers chosen by Joao Carlos Correia Leitao Universidade da Beira Interior |
| By: | Isabel Mota; António Brandão |
| Abstract: | This paper aims at explaining how proximity between firms affects cooperation in R&D. For that purpose, it is proposed a three-stage game amongst three firms where each firm decides about location, R&D and output. Firms’ decision about location determines a R&D spillover, which is inversely related to the distance between firms. R&D output is assumed to be cost reducing and exhibit diminishing returns. Cooperation is only allowed in the R&D stage. Our results allow us to conclude that there is a positive relationship between R&D output equilibrium and the distance between firms when firms act independently. When firms cooperate in R&D, R&D output for a cooperating firm increases with the degree of information sharing between them, as well as with a reduction of the distance between cooperating firms. Firms’ decision about location is also affected by R&D activities: if R&D activities run independently, the clustering of firms only occurs for a convex spillover function; if R&D activities run cooperatively, clustering is always observed if there is an increased information sharing between firms. Keywords: Location, R&D cooperation, R&D spillovers |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa04p177&r=mic |
| By: | Camelia Kuhnen (Stanford Graduate School of Business); Brian Knutson (Stanford University Department of Psychology) |
| Abstract: | Investors systematically deviate from rationality when making financial decisions, yet the mechanisms responsible for these deviations have not been identified. Using event-related fMRI, we examined whether anticipatory neural activity would predict optimal and suboptimal choices in a financial decision-making task. We characterized two types of deviations from the optimal investment strategy of a rational risk- neutral agent as risk-seeking mistakes and risk-aversion mistakes. Nucleus accumbens activation preceded risky choices as well as risk- seeking mistakes, while anterior insula activation preceded riskless choices as well as risk-aversion mistakes. These findings suggest that distinct neural circuits linked to anticipatory affect promote different types of financial choices, and indicate that excessive activation of these circuits may lead to investing mistakes. Thus, consideration of anticipatory neural mechanisms may add predictive power to the rational actor model of economic decision-making. |
| Keywords: | neuroeconomics, neurofinance, brain, investing, emotions, affect |
| JEL: | D81 D83 D84 C91 G11 |
| Date: | 2005–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpex:0509001&r=mic |
| By: | Rafael Kelman (PSR); Luiz Barroso (PSR); Mario Pereira (PSR) |
| Abstract: | The objective of this work is to investigate market power issues in bid- based hydrothermal scheduling. Initially, market power is simulated with a single stage Nash-Cournot equilibrium model. Market power assessment for multiple stages is then carried through a stochastic dynamic programming scheme. The decision in each stage and state is the equilibrium of a multi-agent game. Thereafter, mitigation measures, specially bilateral contracts, are investigated. Case studies with data taken from the Brazilian system are presented and discussed. |
| Keywords: | Game theory, Hydroelectric-thermal power generation, Power generation economics |
| JEL: | C7 D8 |
| Date: | 2005–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpga:0508009&r=mic |
| By: | Erik Verhoef |
| Abstract: | This paper considers second-best congestion pricing in the monocentric city, with endogenous residential density and endogenous labour supply. A spatial general equilibrium model is developed that allows consideration of the three-way interactions between urban density, traffic congestion and labour supply. Congestion pricing schemes are analyzed that are second best ‘by design’ (and not because distortions exist elsewhere in the spatial economy), like cordon charging and flat kilometre charges. Both for Cobb-Douglas utility and for CES utility, the analyses suggest that the relative welfare losses from second-best pricing, compared to first-best pricing, are surprisingly small. *Affiliated to the Tinbergen Institute, Roetersstraat 31, 1018 WB Amsterdam. Key words: Traffic congestion, second-best pricing, urban structure, spatial general equilibrium JEL codes: R41, R48, D62 |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa04p408&r=mic |
| By: | John Duffy (University of Pittsburgh); Tatiana Kornienko (University of Stirling) |
| Abstract: | We explore whether natural human competitiveness can be exploited to stimulate charitable giving in a controlled laboratory experiment involving three different treatments of a sequential ``dictator game.'' Without disclosing the actual amounts given and kept, in each period players are publicly ranked -- by the amount they give away, by the amount they keep for themselves, or spuriously. Our results are generally supportive of the hypothesis that competitive urges can encourage or frustrate altruistic behavior, depending on the competitive frame. We find some support for an alternative hypothesis that relative concerns are due to information-gathering rather than competition. |
| Keywords: | Dictator game, repeated decisions, charitable giving, altruistic behavior, competitive altruism, status, relative standing, tournaments, motivation, information-based relative concerns |
| JEL: | C91 D64 |
| Date: | 2005–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpex:0508002&r=mic |
| By: | Rosina Moreno; Raffaele Paci; Stefano Usai |
| Abstract: | This paper investigates on the presence of innovation and production clusters in Europe. The analysis is based on an original statistical databank set up by CRENoS on regional patenting at the European Patent Office spanning from 1978 to 1997 and classified by ISIC sectors (3 digit) and on the Cambridge Econometrics database on production activity. We consider 138 regions of 17 countries in Europe, the 15 members of the European Union plus Switzerland and Norway. Firstly, an analysis of the spatial distribution of innovation and production activities in Europe is performed. Some global and local indicators for spatial association are presented, summarising the presence of a general dependence process in the distribution of the phenomena under examination. The analysis is implemented for different manufacturing macro-sectors to assess for the presence of significant differences in the their spatial features. Moreover, the extent and strength of spatial externalities are evaluated for three different periods: 1981-83, 1988-90 and 1995-97. Secondly, the spatial mapping of innovation is compared to the distribution of productive activity. Keywords: Innovation activity, Production specialisation, Spatial analysis, European regions. |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa04p587&r=mic |
| By: | José Pedro Pontes |
| Abstract: | Although empirical evidence shows that the relationship between foreign direct investment (FDI) and trade is complex, theories of international investment (both vertical and horizontal) present simple patterns of relation. By allowing for different locations of vertically-related stages of production and distinguishing between trade in finished goods and trade in intermediate goods, this paper introduces a non monotonic relationship between multinational firms and trade costs, which must be neither too high nor too low for FDI to arise. Exports and FDI be have as complements for high levels of trade costs and as substitutes otherwise. J.E.L. Classification: F23, F12, C72. Keywords: Foreign Direct Investment, Multinationals, Trade, Intermediate Goods, Non cooperative Games. |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa04p47&r=mic |