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on Microeconomics |
| By: | Ramón Jesús Flores Díaz; Maurice Koster; Ines Lindner; Elisenda Molina |
| Abstract: | Given a social network, we are interested in the problem of measuring the influence of a group of agents to lead the society to adopt their behavior. Motivated by the description of terrorist movements, we provide a markovian dynamical model for non-symmetric societies, which takes into account two special features: the hard core terrorist group cannot be influenced, and the remaining agents may change from active to non-active and vice versa during the process. In this setting, we interpret the absorption time of the model, which measures how quickly the terrorist movement achieve the support of all society, as a group measure of power. In some sense, our model generalizes the classical approach of DeGroot to consensus formation |
| Keywords: | Collective action, Social networks, Influence and Diffusion models |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:ws104830&r=mic |
| By: | Daniele Nosenzo (School of Economics, University of Nottingham); Theo Offerman (CREED, Department of Economics, University of Amsterdam); Martin Sefton (School of Economics, University of Nottingham); Ailko van der Veen (CREED, Department of Economics, University of Amsterdam) |
| Abstract: | We examine the effectiveness of bonuses and fines in an ‘inspection game’ where an employer can learn the effort of a worker through costly inspection. Standard game theoretic analysis predicts that fines discourage shirking, whereas bonuses encourage shirking. In contrast, ownpayoff effects suggest that both fines and bonuses discourage shirking. In an experiment we find that fines are more effective than bonuses in reducing shirking. However, we do not find that bonuses encourage shirking. Behavioral theories based on Impulse Balance Equilibrium or Quantal Response Equilibrium provide a good account of deviations from Nash equilibrium predictions. |
| Keywords: | Inspection Games; Costly Monitoring; Rewards and Punishments; Bonuses and Fines; Quantal Response Equilibrium; Impulse Balance Equilibrium; Experiment |
| JEL: | C70 C72 C92 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2010-21&r=mic |
| By: | Alberto Martin |
| Abstract: | We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom rests on one implicit assumption: entrepreneurs can only access monitored lending. If a new set of markets is added to provide entrepreneurs with additional funds, efficiency can be attained in equilibrium. An important characteristic of these additional markets is that lending in them must be unmonitored, in the sense that it does not condition total borrowing or investment by entrepreneurs. This makes it possible to attain efficiency by pooling all entrepreneurs in the new markets while separating them in the markets for monitored loans. |
| Keywords: | Adverse Selection, Credit Markets, Collateral, Monitored Lending, Screening |
| JEL: | D82 G20 D62 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1257&r=mic |
| By: | Fabio Canova |
| Abstract: | We investigate the similarities of macroeconomic fluctuations in the Mediterranean basin and their convergence. A model with three geo-political indicators, covering the West, the East and the MENA portions of the Mediterranean, characterizes well the historical experience since the early 1980. Convergence and divergence coexist in the region and are reversible. Except for the West, domestic cyclical fluctuations are still due to national and idiosyncratic causes. The outlook for the next few years looks rosier for the MENA and the East blocks than for the West. |
| Keywords: | Bayesian Methods; Business cycles; Mediterranean basin; Developing and developed countries. |
| JEL: | C11 C33 E32 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1258&r=mic |
| By: | Kotsios, Panayotis |
| Abstract: | The entry of new competitors operates as a balancing force against high levels of industrial concentration and the abuse of dominant position by firms with large market shares. Entry increases supply, lowers prices, intensifies innovation and brings equilibrium to the markets that don’t operate in a socially desirable manner. This paper examines the impact of regulatory restrictions to the entry of new competitors in industrial sectors. It provides a short description of the 13 most important sources of regulatory barriers and assesses their role and importance as entry barriers. The conclusion is that regulatory restrictions can be a very important, almost insurmountable barrier to the entry of new competitors, but their role is not always socially harmful. The use of certain sources of regulatory barriers is effective in protecting social welfare instead of harming it. Barriers that promote new competition or are applied in order to protect consumer welfare are socially useful, while barriers that restrict competition and limit new competitor entry, in cases other than natural monopolies, are socially harmful. |
| Keywords: | entry; competition; industry; barriers |
| JEL: | L0 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27976&r=mic |
| By: | Lautier, Delphine; Galli, Alain |
| Abstract: | This article analyzes long-term dynamic hedging strategies relying on term structure models of commodity prices and proposes a new way to calibrate the models which takes into account the error associated with the hedge ratios. Different strategies, with maturities up to seven years, are tested on the American crude oil futures market. The study considers three recent and efficient models respectively with one, two, and three factors. The continuity between the models makes it possible to compare their performances, which are judged on the basis of the errors associated with a delta hedge. The strategies are also tested for their sensitivity to the maturities of the positions and to the frequency of the portfolio rollover. We found that our method gives the best of two seemingly incompatible worlds: the higher liquidity of short-term futures contracts for the hedge portfolios, together with markedly improved performances. Moreover, even if it is more complex, the three-factor model is by far, the best. |
| Keywords: | Dynamic Hedging; Commodities; Futures; Long-term commitment; Calibration; |
| JEL: | Q49 C52 C13 G13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/5470&r=mic |
| By: | Christian Garavaglia (University of Milano-Bicocca, Faculty of Statistics - KITeS, Bocconi University, Milan, Italy); Franco Malerba (KITeS, Bocconi University, Milan, Italy - Bocconi University, Department of Economics); Luigi Orsenigo (KITeS, Bocconi University, Milan, Italy - DIMI, University of Brescia); Michele Pezzoni (KITeS, Bocconi University, Milan, Italy - DIMI, University of Brescia) |
| Abstract: | This paper examines how the nature of the technological regime governing innovative activities and the structure of demand interact in determining market structure, with specific reference to the pharmaceutical industry. The key question concerns the observation that - despite high degrees of R&Dand marketing-intensity - concentration has been consistently low during the whole evolution of the industry. Standard explanations of this phenomenon refer to the random nature of the innovative process, the patterns of imitation and the fragmented nature of the market into multiple, independent submarkets. We delve deeper into this issue by using an improved modified version of our previous “history-friendly” model of the evolution of pharmaceuticals. Thus, we explore how changes in the technological regime and/or in the structure of demand may generate or not substantially higher degrees of concentration. The main results are that, while technological regimes remain fundamental determinants of the patterns of innovation, demand structure plays indeed a crucial role in preventing the emergence of concentration through a partially endogenous process of discovery of new submarkets. However, it is not simply market fragmentation as such that produces this result, but rather the entity of the “prize” that innovators can gain relative to the overall size of the market. Similarities and differences with other approaches are also discussed. |
| Keywords: | Industrial dynamics, innovation, market structure, pharmaceuticals, History-Friendly model |
| JEL: | C63 L10 L65 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:kites36_wp&r=mic |
| By: | Marco Dani |
| Abstract: | Recognised and shaped by regulatory strategies pulling in different directions, the European consumer may be portrayed as a fractured subject. By drawing from the Pasta and Hormones litigation, the article investigates its multiple and heterogeneous identities as resulting from the interaction between domestic, EU and WTO law. It argues that the fractured consumer could be viewed as a realistic legal projection of the human condition of actual individuals engaging in consumer activities, and sets out an adjudicative strategy for assembling its identities at an argumentative level so as to do the best by their promises and counter their biases. The article concludes by suggesting that the conceptual framework construed around the fractured consumer could improve the transparency and contestability of adjudication and policy-making. |
| Keywords: | Consumer law, legal pluralism, subjectification, interpretive community, Pasta, Hormones. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:29&r=mic |
| By: | Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Long Liu (Department of Economics, College of Business, University of Texas at San Antonio, One UTSA Circle, TX 78249-0633) |
| Abstract: | This paper extends the instrumental variable estimators of Kelejian and Prucha (1998) and Lee (2003) proposed for the cross-sectional spatial autoregressive model to the random effects spatial autoregressive panel data model. It also suggests an extension of the Baltagi (1981) error component 2SLS estimator to this spatial panel model. |
| Keywords: | Panel Data, Spatial Model, Two Stage Least Squares, Error Components. |
| JEL: | C13 C21 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:127&r=mic |
| By: | M. Cristelli; L. Pietronero; A. Zaccaria |
| Abstract: | We present an overview of some representative Agent-Based Models in Economics. We discuss why and how agent-based models represent an important step in order to explain the dynamics and the statistical properties of financial markets beyond the Classical Theory of Economics. We perform a schematic analysis of several models with respect to some specific key categories such as agents' strategies, price evolution, number of agents, etc. In the conclusive part of this review we address some open questions and future perspectives and highlight the conceptual importance of some usually neglected topics, such as non-stationarity and the self-organization of financial markets. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1101.1847&r=mic |
| By: | Choi, Eugene K. |
| Abstract: | The key purpose of this study is to examine the remarkable context within the evolution of the paradigm innovation in fashion product development, in the case of Japanese fashion apparel, UNIQLO, created by Fast Retailing Corp in 1998. The key theme hereby concerns innovation, and this perspective surely necessitates Fast Retailing窶冱 strategic collaboration with a Japanese new material and artificial textile powerhouse, TORAY: as TORAY窶冱 technological provision was an essential source for the dynamic product and process innovation behind the extraordinary growth of UNIQLO. Furthermore, the technological superiority also entailed its innovative positioning in market competition. It is crucial to examine how and why the two brought about their core competences together through new combinations of concepts. This should impart a few promising research perspectives regarding their innovative model of unchallenged value creation, strong market competitiveness, and sustainable corporate growth. |
| Keywords: | Paradigm Innovation, Product Development, Business Model, Japanese Apparel Industry, Fashion Apparel, Fast Fashion, Fast Retailing, UNIQLO, TORAY, Alliance, Virtual Vertical Integration |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:11-01&r=mic |
| By: | Ettinger, David |
| Abstract: | We consider an auction setting, in a symmetric information framework, in which bidders, even if they fail to obtain the good, care about the price paid by the winner. We prove that the outcome of the first-price auction is not affected by identity-independent price externalities, while the outcome of the second-price auction is. In contrast, identity-dependent price externalities affect the outcome of both auction formats. In any case, the second-price auction exacerbates the effects of price externalities. |
| Keywords: | Budget-constraints; toeholds; externalities; allocation; revenue; auctions; |
| JEL: | G32 D62 D44 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/5447&r=mic |
| By: | Eric Brousseau; Jean-Michel Glachant |
| Abstract: | Regulation of utilities in the XXI Century is challenged by the fast pace of change notably the acceleration of innovation, the restructuring of industry as sets of modular chains and the spreading of new information and communication technology. Living in this world of rapid and renewed changes regulators are also challenged by the basic characteristics of their institutional embeddedness. In the real world, far from being the alpha and the omega of regulation, regulators only act in a multilevel and multichannel frame of regulatory institutions. However regulators can bring a core piece of "reflexive governance" to favour the new industry and institutions' changes. It is by building "knowledge platforms" on an "open forum" model. |
| Keywords: | Reflexive Governance; Regulation; Knowledge Platform; Open Forum; Innovation |
| Date: | 2010–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/90&r=mic |
| By: | C. Sofia Machado (Instituto Politécnico do Cávado e do Ave); Miguel Portela (Universidade do Minho - NIPE and IZA) |
| Abstract: | Using a panel of new firms and their employees, this paper studies the promotion opportunities for older workers within the same firm. Survival analysis suggests that younger employees experience shorter times to promotion than older workers and, therefore, the latter face a smaller likelihood of promotion. Although men are promoted more often than women, empirical results show that women have shorter survival times to promotion than men. Also, previous promotions are stronger determinants of subsequent ones and this finding provides support to the evidence on promotion “fast-tracks”. |
| Keywords: | aging, older workers, employment relationships, promotion |
| JEL: | J14 J21 D21 J62 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:03/2011&r=mic |