Betting on Hitler: The value of political connections in Nazi Germany

This paper examines the value of connections between German industry andthe Nazi movement in early 1933. Drawing on previously unused contemporarysources about management and supervisory board composition and stock returns,we find that one out of seven firms, and a large proportion of the biggest companies,had substantive links with the National Socialist German Workers Party. Firmssupporting the Nazi movement experienced unusually high returns, outperformingunconnected ones by 5% to 8% between January and March 1933. These resultsare not driven by sectoral composition and are robust to alternative estimatorsand definitions of affiliation.

Bubbles and capital flows

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries. This view of asset price bubbles could eventually provide a simple account of some real world phenomenae that have been difficult to model before, such as the recurrence and depth of financial crises or their puzzling tendency to propagate across countries.

Portfolio choice beyond the traditional approach

This paper surveys asset allocation methods that extend the traditional approach. An important feature of the the traditional approach is that measures the risk and return tradeoff in terms of mean and variance of final wealth. However, there are also other important features that are not always made explicit in terms of investor s wealth, information, and horizon: The investor makes a single portfolio choice based only on the mean and variance of her final financial wealth and she knows the relevant parameters in that computation. First, the paper describes traditional portfolio choice based on four basic assumptions, while the rest of the sections extend those assumptions. Each section will describe the corresponding equilibrium implications in terms of portfolio advice and asset pricing.

R&D in the pharmaceutical industry: A world of small innovations

It is commonly argued that in recent years pharmaceutical companies have directed theirR&D towards small improvements of existing compounds instead of more risky drastic innovations. In this paper we show that the proliferation of these small innovations is likely to be linked to the lack of market sensitivity of a part of the demand to changes in prices. Compared to their social contribution, small innovations are relatively more profitable than large ones because they are targeted to the smaller but more inelastic part of the demand. We also study the effect of regulatory instruments such as price ceilings, copayments and reference prices and extend the analysis to competition in research.

Speculative securities

A speculative security is an asset whose payoff depends on a random shock uncorrelated with economic fundamentals (a sunspot) about which some traders have superior information. In this paper we show that agents may find it desirable to trade such a security in spite of the fact that it is a poorer hedge against their endowment risks as the time oftrade, and has an associated adverse selection cost. In the specific institutional setting of innovation of futures contracts, we show that a futures exchange may not have an incentive to introduce a speculative security even when all traders favor it.

Reputation and honesty in a market for information

Previous works on asymmetric information in asset markets tendto focus on the potential gains in the asset market itself. We focus on the market for information and conduct an experimental study to explore, in a game of finite but uncertain duration, whether reputation can be an effective constraint on deliberate misinformation. At the beginning of each period, an uninformed potential asset buyer can purchase information, at a fixed price and from a fully-informed source, about the value of the asset in that period. The informational insiders cannot purchase the asset and are given short-term incentives to provide false information when the asset value is low. Our model predicts that, in accordance with the Folk Theorem, Pareto-superior outcomes featuring truthful revelation should be sustainable. However, this depends critically on beliefs about rationality and behavior. We find that, overall, sellers are truthful 89% of the time. More significantly, the observed frequency of truthfulness is 81% when the asset value is low. Our result is consistent with both mixed-strategy and trigger strategy interpretations and provides evidence that most subjects correctly anticipate rational behavior. We discuss applications to financial markets, media regulation, and the stability of cartels.

Insurance with frequent trading: A dynamic analysis of efficient insurance markets

This paper extends existing insurance results on the type of insurance contracts needed for insurance market efficiency toa dynamic setting. It introduces continuosly open markets that allow for more efficient asset allocation. It alsoeliminates the role of preferences and endowments in the classification of risks, which is done primarily in terms of the actuarial properties of the underlying riskprocess. The paper further extends insurability to include correlated and catstrophic events. Under these very general conditions the paper defines a condition that determines whether a small number of standard insurance contracts (together with aggregate assets) suffice to complete markets or one needs to introduce such assets as mutual insurance.

External technology sources: Embodied or disembodied technology acquisition

This paper analyzes the choice between different innovationactivities of a firm. In particular, we study the technologyacquisition decision of the firm, i.e. its technology BUYdecision as part of the firm's innovation strategy. We take a closer look at the different types of external technologyacquisition where we distinguish two broad types of technologybuy decisions. On the one hand, the firm can acquire new technology which is embodied in an asset that is acquired suchas new personnel or (parts of) other firms or equipment. On the other hand, the firm can obtain new technology disembodiedthrough a licensing agreement or by outsourcing the technologydevelopment from an R&D contractor or consulting agency. Through a series of Probit regressions, we discuss variables that might affect external technology acquisition choices of the firm andpay special attention to the firm's abilities to scan the market for technology and to absorb the technology acquired. Furthermore, we analyze the effect of different appropriationregimes on the decision of the firm to source technology.

Unemployment insurance with endogenous search intensity and precautionary saving

A welfare analysis of unemployment insurance (UI) is performed in a generalequilibrium job search model. Finitely-lived, risk-averse workers smooth consumption over time by accumulating assets, choose search effort whenunemployed, and suffer disutility from work. Firms hire workers, purchasecapital, and pay taxes to finance worker benefits; their equity is the assetaccumulated by workers. A matching function relates unemployment, hiringexpenditure, and search effort to the formation of jobs. The model is calibrated to US data; the parameters relating job search effort to the probability of job finding are chosen to match microeconomic studies ofunemployment spells. Under logarithmic utility, numerical simulation shows rather small welfaregains from UI. Even without UI, workers smooth consumption effectivelythrough asset accumulation. Greater risk aversion leads to substantiallylarger welfare gains from UI; however, even in this case much of its welfareimpact is due not to consumption smoothing effects, but rather to decreased work disutility, or to a variety of externalities.

Duality in mean-variance frontiers with conditioning information

Portfolio and stochastic discount factor (SDF) frontiers are usually regarded as dual objects, and researchers sometimes use one to answer questions about the other. However, the introduction of conditioning information and active portfolio strategies alters this relationship. For instance, the unconditional portfolio frontier in Hansen and Richard (1987) is not dual to the unconditional SDF frontier in Gallant, Hansen and Tauchen (1990). We characterise the dual objects to those frontiers, and relate them to the frontiers generated with managed portfolios, which are commonly used in empirical work. We also study the implications of a safe asset and other special cases.

Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

A diagram of public spaces within urban landscape as a strategy for sustainable urban planning in Chinese cities

Destruction of historical urban fabric in many Chinese cities and towns, without the possibility of its recovery as an urban asset, leads us to consider alternative strategies and criteria for formulating new urban projects, using creative urban planning instruments and strategies to provide a sense of place and identity to the urban landscape. The challenge is to set up an urban structure that constitutes a spatial reference system, a structure consisting of a set of urban landmarks that construct a system of related public spaces, endowed with collective significance and identity. Such a network could include a wide variety of urban typologies and natural elements. An important result of this strategy would be the recovery of the social and cultural values attached to the natural landscape in Chinese civilization. Hangzhou city will be analyzed as a case study

Los nuevos activos del árbitro de baloncesto: poder blando, empatía y comunicación. El caso del Comité catalán de Árbitros de Baloncesto

El arbitraje del baloncesto ha experimentado numerosos cambios en los últimos diez años. El presente artículo pretende aunar algunas bases conceptuales y metodológicas a partir de las cuales definir un nuevo perfil operativo para el denominado ‘árbitro moderno’. En este sentido, se ahondará en el análisis de las nuevas competencias comunicativas asociadas e indisolubles a la tarea arbitral, capitalizadas por el diálogo, la administración de ‘poder blando’, la gestión emocional y la adopción, por parte del árbitro, de una renovada actitud empática ante todos los componentes del juego. Así las cosas, este trabajo, en su conjunto y con la ayuda de un estudio de caso, propondrá la definición teórica de nuevas lógicas de actuación arbitral propias del baloncesto del siglo XXI.

Estudi de software lliure en diferents entorns

El software lliure està tenint últimament un pes cada cop més important en les empreses, però encara és el gran desconegut per a molta gent. Des de la seva creació als anys 80 fins ara, hi ha hagut un creixement exponencial de software lliure de gran qualitat, oferint eines per a tot tipus de necessitats, eines ofimàtiques, gestors de correu, sistemes de fitxer, sistemes operatius…. Tot aquest moviment no ha passat desapercebut per a molts usuaris i empreses, que s’han aprofitat d’ell per cobrir les seves necessitats. Pel que fa a les empreses, cada cop n’hi ha més que en petita o gran mesura, utilitzen el software lliure, ja sigui per el seu menor cost d’adquisició, o bé per la seva gran fiabilitat o per que és fàcilment adaptable o per no establir cap lligam tecnològic, en definitiva per tenir més llibertat. En el moment de la creació d’una nova empresa, on es parteix de zero en tota la tecnologia informàtica, és el moment menys costòs d’implementar l’arquitectura informàtica amb software lliure, és quan l’impacte que té sobre l’empresa, usuaris i clients és menor. En les empreses que ja tenen un sistema informàtic, caldrà establir un pla de migració, ja sigui total o parcial. La finalitat d’aquest projecte no és la de dir quin software és millor que l’altre o de dir quin s’ha d’instal•lar, sinó el de donar a conèixer el món del software lliure, mostrar part d’aquest software, fer alguna comparativa de software lliure amb software propietari, donant idees i un conjunt de solucions per a empreses, per què una empresa pugui agafar idees d’implementació d’algunes de les solucions informàtiques exposades o seguir algun dels consells proposats. Actualment ja hi ha moltes empreses que utilitzen software lliure. Algunes només n’utilitzen una petita part en les seves instal•lacions, ja que el fet de que una empresa funcioni al 100% amb software lliure, tot i que n’hi comença ha haver, de moment ho considero una mica arriscat, però que en poc temps, aquest fet serà cada cop més habitual.

A Model for Improving the Quality of Student Internship Placements in Engineering Degrees

Work Internship Placements (WIP) is a new and transversal enterprise internships programme, which is focused on quality improvement, academic control and satisfaction of collaborating enterprises. This programme is addressed to the engineering students of the PolytechnicSchool at the University of Girona (UdG) in Spain. The fundamental WIP infrastructure combines a web-based intranet platform, that provides a complete set of WIP tools, with a protocol of procedures and tasks that are observed and followed at all internship stages by every participating agent, i.e. enterprises, students, coaching professors and administrative staff. Our new programme is centered on a broader, more holistic internship placement procedure than the traditional “career and academic goals” approach. The WIP programme has been found to be a valuable asset in addressing enterprise and student needs in the experiential project