Retribution in a cheap-talk experiment

We use a two-person 3-stage game to investigate whether people choose to punish or reward another player by sacrificing money to increase or decrease the other person’s payoff. One player sends a message indicating an intended play, which is either favorable or unfavorable to the other player in the game. After the message, the sender and the receiver play a simultaneous 2x2 game. A deceptive message may be made, in an effort to induce the receiver to make a play favorable to the sender. Our focus is on whether receivers’ rates of monetary sacrifice depend on the process and the perceived sender’s intention, as is suggested by the literature on deception and procedural satisfaction. Models such as Rabin (1993), Sen (1997), and Charness and Rabin (1999) also permit rates of sacrifice to be sensitive to the sender’s perceived intention, while outcome-based models such as Fehr and Schmidt (1999) and Bolton and Ockenfels (1997) predict otherwise. We find that deception substantially increases the punishment rate as a response to an action that is unfavorable to the receiver. We also find that a small but significant percentage of subjects choose to reward a favorable action choice made by the sender.

Publishing performances of spanish academics: 1970-2004

The aim of this note is to complement some of the results appearing in Dolado et al. (2003) article “Publishing Performance in Economics: Spanish Rankings” Particularly we want to focus on three issues: the robustness of the results regardless of the time span considered, the evaluation of a researcher to the advance of the knowledge, and to what extent the choice of a particular database to download the results can affect the results. Differences are significant when we expand the time period considered. There are also small but significant differences if we combine datasets to derive the rankings.

A change would do you good . . . An experimental study on how to overcome coordination failure in organizations

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set in a corporate environment where subjects' payoffs depend on coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In an initial phase, the benefits of coordination are low relative to the cost of increased effort. Play in this initial phase typically converges to an inefficient outcome with employees failing to coordinate at high effort levels. The experimental design then explores the effects of varying the financial incentives to coordinate at a higher effort level. We find that an increase in the benefits of coordination leads to improved coordination, but, surprisingly, large increases have no more impact than small increases. Once subj

Chaotic dynamics in credit constrained emerging economies

This paper analyzes the role of financial development as a source of endogenous instability in small open economies. By assuming that firms face credit constraints, our model displays a complex dynamic behavior for intermediate values of the parameter representing the level of financial development of the economy. The basic implication of our model is that economies experiencing a process of financial development are more unstable than both very underdeveloped and very developed economies. Our instability concept means that small shocks have a persistent effect on the long run behavior of the model and also that economies can exhibit cycles with a very high period or even chaotic dynamic patterns.

Una estimación del coste marginal en bienestar del sistema impositivo en España

Actual tax systems do not follow the normative recommendations of yhe theory of optimal taxation. There are two reasons for this. Firstly, the informational difficulties of knowing or estimating all relevant elasticities and parameters. Secondly, the political complexities that would arise if a new tax implementation would depart too much from current systems that are perceived as somewhat egalitarians. Hence an ex-novo overhaul of the tax system might just be non-viable. In contrast, a small marginal tax reform could be politically more palatable to accept and economically more simple to implement. The goal of this paper is to evaluate, as a step previous to any tax reform, the marginal welfare cost of the current tax system in Spain. We do this by using a computational general equilibrium model calibrated to a point-in-time micro database. The simulations results show that the Spanish tax system gives rise to a considerable marginal excess burden. Its order of magnitude is of about 0.50 money units for each additional money unit collected through taxes.

Increasing quasiconcave production and utility functions with diminishing returns to scale

In microeconomic analysis functions with diminishing returns to scale (DRS) have frequently been employed. Various properties of increasing quasiconcave aggregator functions with DRS are derived. Furthermore duality in the classical sense as well as of a new type is studied for such aggregator functions in production and consumer theory. In particular representation theorems for direct and indirect aggregator functions are obtained. These involve only small sets of generator functions. The study is carried out in the contemporary framework of abstract convexity and abstract concavity.

Accuracy vs. simplicity: a complex trade-off

Inductive learning aims at finding general rules that hold true in a database. Targeted learning seeks rules for the predictions of the value of a variable based on the values of others, as in the case of linear or non-parametric regression analysis. Non-targeted learning finds regularities without a specific prediction goal. We model the product of non-targeted learning as rules that state that a certain phenomenon never happens, or that certain conditions necessitate another. For all types of rules, there is a trade-off between the rule's accuracy and its simplicity. Thus rule selection can be viewed as a choice problem, among pairs of degree of accuracy and degree of complexity. However, one cannot in general tell what is the feasible set in the accuracy-complexity space. Formally, we show that finding out whether a point belongs to this set is computationally hard. In particular, in the context of linear regression, finding a small set of variables that obtain a certain value of R2 is computationally hard. Computational complexity may explain why a person is not always aware of rules that, if asked, she would find valid. This, in turn, may explain why one can change other people's minds (opinions, beliefs) without providing new information.

Some things couples always wanted to know about stable matchings (but were afraid to ask)

It is well-known that couples that look jointly for jobs in the same centralized labor market may cause instabilities. We demonstrate that for a natural preference domain for couples, namely the domain of responsive preferences, the existence of stable matchings can easily be established. However, a small deviation from responsiveness in one couple's preference relation that models the wish of a couple to be closer together may already cause instability. This demonstrates that the nonexistence of stable matchings in couples markets is not a singular theoretical irregularity. Our nonexistence result persists even when a weaker stability notion is used that excludes myopic blocking. Moreover, we show that even if preferences are responsive there are problems that do not arise for singles markets. Even though for couples markets with responsive preferences the set of stable matchings is nonempty, the lattice structure that this set has for singles markets does not carry over. Furthermore we demonstrate that the new algorithm adopted by the National Resident Matching Program to fill positions for physicians in the United States may cycle, while in fact a stable matchings does exist, and be prone to strategic manipulation if the members of a couple pretend to be single.

Endogeneizing know-how flows through the nature of R&D investments

In this paper we carefully link knowledge flows to and from a firms innovation process with this firms investment decisions. Three types of investments are considered: investments in applied research, investments in basic research, and investments in intellectual property protection. Only when basic research is performed, can the firm effectively access incoming knowledge flows and these incoming spillovers serve to increase the efficiency of own applied research.. The firm can at the same time influence outgoing knowledge flows, improving appropriability of its innovations, by investing in protection. Our results indicate that firms with small budgets for innovation will not invest in basic research. This occurs in the short run, when the budget for know-how creation is restricted, or in the long-run, when market opportunities are low, when legal protection is not very important, or, when the pool of accessible and relevant external know-how is limited. The ratio! of basic to applied research is non-decreasing in the size of the pool of accessible external know-how, the size and opportunity of the market, and, the effectiveness of intellectual property rights protection. This indicates the existence of economies of scale in basic research due to external market related factors. Empirical evidence from a sample of innovative manufacturing firms in Belgium confirms the economies of scale in basic research as a consequence of the firms capacity to access external knowledge flows and to protect intellectual property, as well as the complementarity between legal and strategic investments.

Petrol consumption and redistributive effects of its taxation in Spain

The objective of this paper is to estimate a petrol consumption function for Spain and to evaluate the redistributive effects of petrol taxation. We use micro data from the Spanish Household Budget Survey of 1990/91 and model petrol consumption taking into account the effect that income changes may have on car ownership levels, as well as the differences that exist between expenditure and consumption. Our results show the importance that household structure, place of residence and income have on petrol consumption. We are able to compute income elasticities of petrol expenditure, both conditional and unconditional on the level of car ownership. Non-conditional elasticities, while always very close to unit values, are lower for higher income households and for those living in rural areas or small cities. When car ownership levels are taken into account, conditional elasticities are obtained that are around one half the value of the non- conditional ones, being fairly stable across income categories and city sizes. As regards the redistributive effects of petrol taxation, we observe that for the lowest income deciles the share of petrol expenditure increases with income, and thus the tax can be regarded as progressive. However, after a certain income level the tax proves to be regressive.

Sources of Competitiveness in Tourist Local Systems

At the end of the XIX Century, Marshall described the existence of some concentrations of small and medium enterprises specialised in a specific production activity in certain districts of some industrial English cities. Starting from his contribute, Italian scholars have paid particular attention to this local system of production coined by Marshall under the term industrial district. In other countries, different but related territorial models have played a central role as the milieu or the geographical industrial clusters. Recently, these models have been extended to non-industrial fields like culture, rural activities and tourism. In this text, we explore the extension of these territorial models to the study of tourist activities in Italy, using a framework that can be easily applied to other countries or regions. The paper is divided in five sections. In the first one, we propose a review of the territorial models applied to tourism industry. In the second part, we construct a tourist filiere and we apply a methodology for the identification of local systems through GIS tools. Thus, taxonomy of the Italian Tourist Local Systems is presented. In the third part, we discuss about the sources of competitiveness of these Tourist Local Systems. In the forth section, we test a spatial econometrics model regarding different kinds of Italian Tourist Local Systems (rural systems, arts cities, tourist districts) in order to measure external economies and territorial networks. Finally, conclusions and policy implications are exposed.

The Effect of relationship lending on firm performance

We examine how relationship lending affects firm performance using a panel dataset of about 70,000 small and medium Spanish firms in the period 1993-2004. We model firm performance jointly with the firm's choice of the number of bank relationships. Controlling for firm fixed effects and using instrumental variables for the decision on the number of bank relationships, we find that firms maintaining exclusive bank relationships have lower profitability. The result is consistent with the view that banks appropriate most of the value generated through close relationships with its borrowers as long as they do not face competition from other lenders.

Publishing performance of spanish academics: 1970-2004: institutions, researchers et al.

This work complements some of the results appearing in the article ?Publishing Performance in Economics: Spanish Rankings? by Dolado et al. . Specifically we focus on the robustness of the results regardless of the time span considered, the effect of the choice of a particular database on the final results, and the effects on changes in the unit of institutional measure (departments versus institutions as a whole). Differences are significant when we expand the time period considered. There are also significant but small differences if we combine datasets to derive the rankings. Finally, department rankings offer a more precise picture of the situation of the Spanish academics, although results do not differ substantially from those obtained when overall institutions are considered.

Petits points et conjecture de Bogomolov

This paper is devoted to the statement known as the Bogomolov conjecture on small points. We present the outline of Zhang’s proof of the generalized version of the conjecture. An explicit bound for the height of a non-torsion variety of an abelian variety is obtained in the frame of Arakelov theory. Some further developments are mentioned.

Model-based diagnosis system: application to constructed wetlands

Report for the scientific sojourn carried out at the Model-based Systems and Qualitative Reasoning Group (Technical University of Munich), from September until December 2005. Constructed wetlands (CWs), or modified natural wetlands, are used all over the world as wastewater treatment systems for small communities because they can provide high treatment efficiency with low energy consumption and low construction, operation and maintenance costs. Their treatment process is very complex because it includes physical, chemical and biological mechanisms like microorganism oxidation, microorganism reduction, filtration, sedimentation and chemical precipitation. Besides, these processes can be influenced by different factors. In order to guarantee the performance of CWs, an operation and maintenance program must be defined for each Wastewater Treatment Plant (WWTP). The main objective of this project is to provide a computer support to the definition of the most appropriate operation and maintenance protocols to guarantee the correct performance of CWs. To reach them, the definition of models which represent the knowledge about CW has been proposed: components involved in the sanitation process, relation among these units and processes to remove pollutants. Horizontal Subsurface Flow CWs are chosen as a case study and the filtration process is selected as first modelling-process application. However, the goal is to represent the process knowledge in such a way that it can be reused for other types of WWTP.