Foreign Direct Investment and Political Uncertainty

Recent developments in the general equilibrium theory of multinationals emphasize the importance of multilateral considerations. Yet, existing explanations and corresponding estimations of FDI patterns have largely limited political and institutional investment impediments to a bilateral framework. Through the application of spatial econometric techniques, I demonstrate that the presence of both domestic and regional political uncertainty generate real options effects that lead to the delay or redirection of foreign direct investment. The magnitude and direction of these effects is conditional upon the host country regime type and the predominant multinational integration strategies in the region. Comparing these results with FDI of U.S. origin, I find evidence for divergent investment behavior by U.S. multinationals during regime changes in partner countries. Additionally, I find no evidence that multinationals from developing countries are more likely to complete cross-border deals in environments characterized by greater political risk or political uncertainty.

Effect of Addiction Modeling Reinforcement Schedules on Delay Discounting

Elevated delay discounting, in which delayed rewards quickly lose value as a function of time, is associated with substance use and abuse. Currently, the direction of causation is unclear: while some research indicates that elevated delay discounting leads to future substance use, it is also possible that chronic substance use and specifically the rate of reinforcement associated with drug use, leads to elevated delay discounting. This project aims to examine the latter possibility. 47 participants completed ten 30-minute daily sessions of a visual attention task, and were reinforced at a rate intended to model drug use (fixed ratio 1) or drug abstinence (fixed ratio 10). Baseline and post-training rates of delay discounting were assessed for hypothetical $50 and $1000. Area under the curve of the indifference points as a function of delay was calculated. A greater area under the curve suggests more self-control, whereas a lower value represents more impulsiveness. Results at the monetary value of both $50 and $1000 showed increased impulsivity in relation to the control for both the FR1 and FR10 groups indicating that the two schedules may both model drug use.