Prices need no preferences: social trends determine decisions in experimental markets for pain relief.

OBJECTIVE: A standard view in health economics is that, although there is no market that determines the "prices" for health states, people can nonetheless associate health states with monetary values (or other scales, such as quality adjusted life year [QALYs] and disability adjusted life year [DALYs]). Such valuations can be used to shape health policy, and a major research challenge is to elicit such values from people; creating experimental "markets" for health states is a theoretically attractive way to address this. We explore the possibility that this framework may be fundamentally flawed-because there may not be any stable values to be revealed. Instead, perhaps people construct ad hoc values, influenced by contextual factors, such as the observed decisions of others. METHOD: The participants bid to buy relief from equally painful electrical shocks to the leg and arm in an experimental health market based on an interactive second-price auction. Thirty subjects were randomly assigned to two experimental conditions where the bids by "others" were manipulated to follow increasing or decreasing price trends for one, but not the other, pain. After the auction, a preference test asked the participants to choose which pain they prefer to experience for a longer duration. RESULTS: Players remained indifferent between the two pain-types throughout the auction. However, their bids were differentially attracted toward what others bid for each pain, with overbidding during decreasing prices and underbidding during increasing prices. CONCLUSION: Health preferences are dissociated from market prices, which are strongly referenced to others' choices. This suggests that the price of health care in a free-market has the capacity to become critically detached from people's underlying preferences.

Innovation, the diesel engine and vehicle markets: Evidence from OECD engine patents

This paper uses a patent data set to identify factors fostering innovation of diesel engines between 1974 and 2010 in the OECD region. The propensity of engine producers to innovate grew by 1.9 standard deviations after the expansion of the car market, by 0.7 standard deviations following a shift in the EU fuel economy standard, and by 0.23 standard deviations. The propensity to develop emissions control techniques was positively influenced by pollution control laws introduced in Japan, in the US, and in the EU, but not with the expansion of the car market. Furthermore, a decline in loan rates stimulated the propensity to develop emissions control techniques, which were simultaneously crowded out by increases in publicly-funded transport research and development. Innovation activities in engine efficiency are explained by market size, loan rates and by (Organisation for Economic Cooperation and Development) diesel prices, inclusive of taxes. Price effects on innovation, outweigh that of the US corporate average fuel economy standards. Innovation is also positively influenced by past transport research and development. © 2014 Elsevier Ltd.

The impact of investor sentiment on stock returns in emerging markets. The case of Central European markets

This is an accepted manuscript of an article published by Taylor & Francis in Eastern European Economics on July 2015, available online: http://dx.doi.org/10.1080/00128775.2015.1079139

Using Markets and Spam to Combat Malware

We propose an economic mechanism to reduce the incidence of malware that delivers spam. Earlier research proposed attention markets as a solution for unwanted messages, and showed they could provide more net benefit than alternatives such as filtering and taxes. Because it uses a currency system, Attention Bonds faces a challenge. Zombies, botnets, and various forms of malware might steal valuable currency instead of stealing unused CPU cycles. We resolve this problem by taking advantage of the fact that the spam-bot problem has been reduced to financial fraud. As such, the large body of existing work in that realm can be brought to bear. By drawing an analogy between sending and spending, we show how a market mechanism can detect and prevent spam malware. We prove that by using a currency (i) each instance of spam increases the probability of detecting infections, and (ii) the value of eradicating infections can justify insuring users against fraud. This approach attacks spam at the source, a virtue missing from filters that attack spam at the destination. Additionally, the exchange of currency provides signals of interest that can improve the targeting of ads. ISPs benefit from data management services and consumers benefit from the higher average value of messages they receive. We explore these and other secondary effects of attention markets, and find them to offer, on the whole, attractive economic benefits for all – including consumers, advertisers, and the ISPs.

Policy impacts on Vietnam stock markets: a case of anomalies and disequilibria 2000-2006

Vietnam launched its first-ever stock market, named as Ho Chi Minh City Securities Trading Center (HSTC) on July 20, 2000. This is one of pioneering works on HSTC, which finds empirical evidences for the following: Anomalies of the HSTC stock returns through clusters of limit-hits, limit-hit sequences; Strong herd effect toward extreme positive returns of the market portfolio;The specification of ARMA-GARCH helps capture fairly well issues such as serial correlations and fat-tailed for the stabilized period. By using further information and policy dummy variables, it is justifiable that policy decisions on technicalities of trading can have influential impacts on the move of risk level, through conditional variance behaviors of HSTC stock returns. Policies on trading and disclosure practices have had profound impacts on Vietnam Stock Market (VSM). The over-using of policy tools can harm the market and investing mentality. Price limits become increasingly irrelevant and prevent the market from self-adjusting to equilibrium. These results on VSM have not been reported before in the literature on Vietnam’s financial markets. Given the policy implications, we suggest that the Vietnamese authorities re-think the use of price limit and give more freedom to market participants.

Art markets

SCOPUS: ch.b

The Vietnam's Transition Economy and Its Fledgling Financial Markets: 1986-2003

In this paper, we analyze the context of Vietnam’s economic standings in the reform period. The first section embarks on most remarkable factors, which promote the development of financial markets are: (i) Doi Moi policies in 1986 unleash ‘productive powers’. Real GDP growth, and key economic indicators improve. The economy truly departs from the old-style command economy; (ii) FDI component is present in the economy as sine qua non; a crucial growth engine, forming part of the financial markets, planting the ‘seeds’ for its growth; and (iii) the private economy is both the result and cause of the reform. Its growth is steady. Today, it represents a powerhouse, and helps form part of the genuine financial economy. A few noteworthy points found in the next section are: (i) No evidence of financial markets existence was found before Doi Moi. The reform has generated a bulk of private-sector financial companies. New developments have roots in the 1992-amended constitution (x3.2); (ii) The need to reform the financial started with the domino collapse of credit cooperatives in early 1990s. More stress is caused by the ‘blow’ of banking deficiency in late 1990s; and (iii) Laws on SBV and credit institutions, and the launch of the stock market are bold steps. Besides, the Asian financial turmoil forces the economy to reaffirm its reform agenda. Our findings also indicate, through empirical evidences, that economic conditions have stabilized throughout the reform, thanks to the contributions of the FDI and private economic sector. Private investment flows continue to be an eminent factor that drives the economy growth.

A multivariate generalized ARCH approach to modeling risk premia in forward foreign exchange rate markets

Assuming that daily spot exchange rates follow a martingale process, we derive the implied time series process for the vector of 30-day forward rate forecast errors from using weekly data. The conditional second moment matrix of this vector is modelled as a multivariate generalized ARCH process. The estimated model is used to test the hypothesis that the risk premium is a linear function of the conditional variances and covariances as suggested by the standard asset pricing theory literature. Little supportt is found for this theory; instead lagged changes in the forward rate appear to be correlated with the 'risk premium.'. © 1990.

Asset pricing in created markets

We investigate the applicability of the present-value asset pricing model to fishing quota markets by applying instrumental variable panel data estimation techniques to 15 years of market transactions from New Zealand's individual transferable quota (ITQ) market. In addition to the influence of current fishing rents, we explore the effect of market interest rates, risk, and expected changes in future rents on quota asset prices. The results indicate that quota asset prices are positively related to declines in interest rates, lower levels of risk, expected increases in future fish prices, and expected cost reductions from rationalization under the quota system. © 2007 American Agricultural Economics Association.

Furnishing a Globalized World: Local Distinctiveness in the International Furniture Industry

Advances in technology, communication, and transportation over the past thirty years have led to tighter linkages and enhanced collaboration across traditional borders between nations, institutions, and cultures. This thesis uses the furniture industry as a lens to examine the impacts of globalization on individual countries and companies as they interact on an international scale. Using global value chain analysis and international trade data, I break down the furniture production process and explore how countries have specialized in particular stages of production to differentiate themselves from competitors and maximize the benefits of global involvement. Through interviews with company representatives and evaluation of branding strategies such as advertisements, webpages, and partnerships, I investigate across four country cases how furniture companies construct strong brands in an effort to stand out as unique to consumers with access to products made around the globe. Branding often serves to highlight distinctiveness and associate companies with national identities, thus revealing that in today’s globalized and interconnected society, local differences and diversity are more significant than ever.

Carbon Markets: Past, Present, and Future

Carbon markets are substantial and they are expanding. There are many lessons from experiences over the past eight years: fewer free allowances, better management of market-sensitive information, and a recognition that trading systems require adjustments that have consequences for market participants and market confidence. Moreover, the emerging international architecture features separate emissions trading systems serving distinct jurisdictions. These programs are complemented by a variety of other types of policies alongside the carbon markets. This sits in sharp contrast to the integrated global trading architecture envisioned 15 years ago by the designers of the Kyoto Protocol and raises a suite of new questions. In this new architecture, jurisdictions with emissions trading have to decide how, whether, and when to link with one another, and policymakers overseeing carbon markets must confront how to measure the comparability of efforts among markets and relative to a variety of other policy approaches.

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