Non-manipulable domains for the Borda count

We characterize the preference domains on which the Borda count satises Arrow's "independence of irrelevant alternatives" condition. Under a weak richness condition, these domains are obtained by xing one preference ordering and including all its cyclic permutations ("Condorcet cycles"). We then ask on which domains the Borda count is non-manipulable. It turns out that it is non-manipulable on a broader class of domains when combined with appropriately chosen tie-breaking rules. On the other hand, we also prove that the rich domains on which the Borda count is non-manipulable for all possible tie-breaking rules are again the cyclic permutation domains.

An Elementary Core Equivalence Theorem in a Countable Economy

We consider an infinite exchange economy with countably many traders, which can be regarded as a natural extension of finite exchange economies to an infinite one. In our countable economy the core defined in the traditional manner would be empty. To avoid this unwanted situation we have to strengthen the notion of “improves upon”. We will achieve this based on the idea that forming coalitions involve costs.

Spillovers from Foreign Direct Investment in Central and Eastern Europe. An index for measuring a country’s potential to benefit from technology spillovers

In the paper, we construct a composite indicator to estimate the potential of four Central and Eastern European countries (the Czech Republic, Hungary, Poland and Slovakia) to benefit from productivity spillovers from foreign direct investment (FDI) in the manufacturing sector. Such transfers of technology are one of the main benefits of FDI for the host country, and should also be one of the main determinants of FDI incentives offered to investing multinationals by governments, but they are difficult to assess ex ante. For our composite index, we use six components to proxy the main channels and determinants of these spillovers. We have tried several weighting and aggregation methods, and we consider our results robust. According to the analysis of our results, between 2003 and 2007 all four countries were able to increase their potential to benefit from such spillovers, although there are large differences between them. The Czech Republic clearly has the most potential to benefit from productivity spillovers, while Poland has the least. The relative positions of Hungary and Slovakia depend to some extent on the exact weighting and aggregation method of the individual components of the index, but the differences are not large. These conclusions have important implication both the investment strategies of multinationals and government FDI policies.

The importance of meta-economics

E.F. Schumacher was one of the first scholars who recognized the crucial role of metaeconomics. In his "Small is beautiful" he writes: "The science of economics is 'so prone to usurp the rest' … because it relates to certain very strong drives of human nature, such as envy and greed. All the greater is the duty of its experts, the economists, to understand and clarify its limitations, that is to say, to understand meta-economics." (Schumacher, E. F. 1973: p. 38) Meta-economics is the basic assumptions about the subject-matter, value-orientation and methodology of economics. (Zsolnai, L. 1991) The paper attempts to reconstruct the metaeconomic foundation of mainstream economics and that of alternative economics initiated by Schumacher. It shows how the emerging alternative economics transcends the erroneous metaeconomic assumptions of mainstream economics by considering the total economic process, choosing sustainable livelihood as basic value-orientation, and employing a constructive methodology.

Global economics governance in the post-crisis world

The Great Crisis has made it clear once again that avoiding the derailment of globalization of trade and finance and the protecting the globe from fragmentation call for enhanced global cooperation and an efficient, flexible and coherent system of global governance. Three interconnected levels (national, regional, and global) comprise the system of global governance. This paper is dealing with some of the main issues of global economic governance in the post-crisis world. It reveals that the turbulence and the distress of the world of the early 21st century have deeper roots and broader sources than the crisis. Global governance therefore has to respond much broader set of challenges in comprehensive framework and long term perspective.

A new epistemic model

Meier (2012) gave a "mathematical logic foundation" of the purely measurable universal type space (Heifetz and Samet, 1998). The mathematical logic foundation, however, discloses an inconsistency in the type space literature: a finitary language is used for the belief hierarchies and an infinitary language is used for the beliefs. In this paper we propose an epistemic model to fix the inconsistency above. We show that in this new model the universal knowledgebelief space exists, is complete and encompasses all belief hierarchies. Moreover, by examples we demonstrate that in this model the players can agree to disagree Aumann (1976)'s result does not hold, and Aumann and Brandenburger (1995)'s conditions are not sufficient for Nash equilibrium. However, we show that if we substitute selfevidence (Osborne and Rubinstein, 1994) for common knowledge, then we get at that both Aumann (1976)'s and Aumann and Brandenburger (1995)'s results hold.

The financial stability and access to financing of SMEs in Hungary

The present study was prepared within the framework of cooperation between the Competitiveness Research Centre, operating within the Institute of Business Economics of Corvinus University of Budapest, and the National Association of Entrepreneurs, based on a commission from the latter. Th e goal of the study was to survey the self-financing capabilities and borrowing opportunities of majority Hungarian-owned small and medium-sized enterprises (SMEs), and to identify potential problems. The results of the research revealed that the high proportion of owner’s equity in the financing structure is not due to difficulties with borrowing, but because enterprises that cover their fi nancing primarily from their own resources have other financing opportunities at their disposal. Although general satisfaction with banks shows a diminishing tendency, it can still be interpreted favourably. The majority of companies have not encountered serious borrowing difficulties. With regard to the system of competitive tenders, company managers have sensed some improvement, but general satisfaction is still lacking. Although the research results suggest that the primary obstacle to growth in 2013 was not the lack of credit or external funding, it is important to emphasize that start-ups, young enterprises and micro-enterprises, which struggle the most with financing worries, were not represented in the analysed database.

An asymptotic test for the Conditional Value-at-Risk

Conditional Value-at-Risk (equivalent to the Expected Shortfall, Tail Value-at-Risk and Tail Conditional Expectation in the case of continuous probability distributions) is an increasingly popular risk measure in the fields of actuarial science, banking and finance, and arguably a more suitable alternative to the currently widespread Value-at-Risk. In my paper, I present a brief literature survey, and propose a statistical test of the location of the CVaR, which may be applied by practising actuaries to test whether CVaR-based capital levels are in line with observed data. Finally, I conclude with numerical experiments and some questions for future research.

Essays on risk aversion, diversification and non -participation

My dissertation consists of three essays. The central theme of these essays is the psychological factors and biases that affect the portfolio allocation decision. The first essay entitled, “Are women more risk-averse than men?” examines the gender difference in risk aversion as revealed by actual investment choices. Using a sample that controls for biases in the level of education and finance knowledge, there is evidence that when individuals have the same level of education, irrespective of their knowledge of finance, women are no more risk-averse than their male counterparts. However, the gender-risk aversion relation is also a function of age, income, wealth, marital status, race/ethnicity and the number of children in the household. The second essay entitled, “Can diversification be learned ?” investigates if investors who have superior investment knowledge are more likely to actively seek diversification benefits and are less prone to allocation biases. Results of cross-sectional analyses suggest that knowledge of finance increases the likelihood that an investor will efficiently allocate his direct investments across the major asset classes; invest in foreign assets; and hold a diversified equity portfolio. However, there is no evidence that investors who are more financially sophisticated make superior allocation decisions in their retirement savings. The final essay entitled, “The demographics of non-participation ”, examines the factors that affect the decision not to hold stocks. The results of probit regression models indicate that when individuals are highly educated, the decision to not participate in the stock market is less related to demographic factors. In particular, when individuals have attained at least a college degree and have advanced knowledge of finance, they are significantly more likely to invest in equities either directly or indirectly through mutual funds or their retirement savings. There is also evidence that the decision not to hold stocks is motivated by short-term market expectations and the most recent investment experience. The findings of these essays should increase the body of research that seeks to reconcile what investors actually do (positive theory) with what traditional theories of finance predict that investors should do (normative theory).

The Barton Lecture Series on Law and Economics- Economic Perspectives at the SEC

Michael Piwowar, Commissioner of the US Securities and Exchange Commissioner lectures as part of the Center for Humanities in an Urban Environment Lecture Series. Lecture held on October 21, 2014.

Essays on the Economics of Higher Education

At least since the seminal works of Jacob Mincer, labor economists have sought to understand how students make higher education investment decisions. Mincer’s original work seeks to understand how students decide how much education to accrue; subsequent work by various authors seeks to understand how students choose where to attend college, what field to major in, and whether to drop out of college.

Broadly speaking, this rich sub-field of literature contributes to society in two ways: First, it provides a better understanding of important social behaviors. Second, it helps policymakers anticipate the responses of students when evaluating various policy reforms.

While research on the higher education investment decisions of students has had an enormous impact on our understanding of society and has shaped countless education policies, students are only one interested party in the higher education landscape. In the jargon of economists, students represent only the `demand side’ of higher education---customers who are choosing options from a set of available alternatives. Opposite students are instructors and administrators who represent the `supply side’ of higher education---those who decide which options are available to students.

For similar reasons, it is also important to understand how individuals on the supply side of education make decisions: First, this provides a deeper understanding of the behaviors of important social institutions. Second, it helps policymakers anticipate the responses of instructors and administrators when evaluating various reforms. However, while there is substantial literature understanding decisions made on the demand side of education, there is far less attention paid to decisions on the supply side of education.

This dissertation uses empirical evidence to better understand how instructors and administrators make decisions and the implications of these decisions for students.

In the first chapter, I use data from Duke University and a Bayesian model of correlated learning to measure the signal quality of grades across academic fields. The correlated feature of the model allows grades in one academic field to signal ability in all other fields allowing me to measure both ‘own category' signal quality and ‘spillover' signal quality. Estimates reveal a clear division between information rich Science, Engineering, and Economics grades and less informative Humanities and Social Science grades. In many specifications, information spillovers are so powerful that precise Science, Engineering, and Economics grades are more informative about Humanities and Social Science abilities than Humanities and Social Science grades. This suggests students who take engineering courses during their Freshman year make more informed specialization decisions later in college.

In the second chapter, I use data from the University of Central Arkansas to understand how universities decide which courses to offer and how much to spend on instructors for these courses. Course offerings and instructor characteristics directly affect the courses students choose and the value they receive from these choices. This chapter reveals the university preferences over these student outcomes which best explain observed course offerings and instructors. This allows me to assess whether university incentives are aligned with students, to determine what alternative university choices would be preferred by students, and to illustrate how a revenue neutral tax/subsidy policy can induce a university to make these student-best decisions.

In the third chapter, co-authored with Thomas Ahn, Peter Arcidiacono, and Amy Hopson, we use data from the University of Kentucky to understand how instructors choose grading policies. In this chapter, we estimate an equilibrium model in which instructors choose grading policies and students choose courses and study effort given grading policies. In this model, instructors set both a grading intercept and a return on ability and effort. This builds a rich link between the grading policy decisions of instructors and the course choices of students. We use estimates of this model to infer what preference parameters best explain why instructors chose estimated grading policies. To illustrate the importance of these supply side decisions, we show changing grading policies can substantially reduce the gender gap in STEM enrollment.

Spic'ing into Existence: Epitaph, Epithet, and the Ethnopoetic Imagination

Quién Es, Quién Somos? Spic’ing into Existence claims a four-fold close-reading: first, analysis of texts: from theoretical meditations to (prison) memoir and film. Second, a half dozen central figures appear, largely Latinx and black American. They cut across a score of registers, socio-economics, ideological reservations, but all are, as Carl Carlton sang, poetry in motion. Writers, poets, theologians, pathologists, artists, comedians, actors, students whose vocation is invocation, the inner surge of their calling. Third, the manuscript draws from a series of historical moments—from radical liberation of the late 60s, to contemporary student activism. Finally, this body of work is movement, in all its social, gestural, and kinesthetic viscera. From this last heading, we peel away layers of what I call the ethnopoet, the fascia undoing that reveals its bio-political anatomy, dressing its bare life with kinship speech. First, the social revolutions of the Civil Rights, Black Power, abolitionism, the Black Panthers and Young Lords, boycotts and jarring artistic performances. These events are superficial not in vain sense, but key epicenters of underground murmurings, the workings of a cunning assailant. She robs not lavish estates, but another day to breathe. Gesturally, as perhaps the interlocutor, lies this author, interspersing his own diatribes to conjure her presence. The final branch is admittedly the most intangible. Kinesthetically, we map the nimbleness, footwork lígera of what I call the ethnopoet. Ethnopoet is no mere aggregate of ethnicity and poetry, but like chemical reaction, the descriptor for its behavior under certain pressures, temperatures, and elements. Elusive and resisting confinement, and therefore definition, the ethnopoet is a shapeshifting figure of how racialized bodies [people of color] respond to hegemonic powers. She is, at bottom, however, a native translator, the plural-lensed subject whose loyalty is only to the imagination of a different world, one whose survival is not contingent upon her exploitation. The native translator’s constant re-calibrations of oppressive power apparatuses seem taxing at best, and near-impossible, at worst. To effectively navigate through these polarized loci, she must identify ideologies that in turn seek “affective liberatory sances” in relation to the dominant social order (43). In a kind of performative contradiction, she must marshall the knowledge necessary to “break with ideology” while speaking within it. Chicana Studies scholar, Chela Sandoval, describes this dual movement as “meta-ideologizing”: the appropriation of hegemonic ideological forms in order to transform them (82). Nuestros padres se subieron encima de La Bestia, y por eso somos pasageros a ese tren. Y ya, dentro su pansa, tenemos que ser vigilantes cuando plantamos las bombas. In Methodology of the Oppressed, Sandoval schematizes this oppositional consciousness around five principle categories: “equal rights,” “revolutionary,” “supremacist,” “separatist,” and “differential.” Taken by themselves, the first four modes appear mutually exclusive, incapable of occupying the same plane, until a fifth pillar emerges. Cinematographic in nature, differential consciousness, as Sandoval defines it, is “a kinetic motion that maneuvers, poetically transfigures, and orchestrates while demanding alienation, perversion, and reformation in both spectators and practitioners” (44). For Sandoval, then, differential consciousness is a methodology that privileges an incredible sense mobility, one reaching artistic sensibilities. Our fourth and final analytic of movement serves an apt example of this dual meaning. Lexically speaking, ‘movement’ may be regarded as a political mobilization of aggrieved populations (through sustained efforts), or the process of moving objects (people or otherwise) from one location to another. Praxis-wise, it is both action and ideal, content and form. Thus, an ethnic poetics must be regarded less as a series of stanzas, shortened lyric, or even arrangement of language, but as a lens through which peripheralized peoples kaleidecope ideological positions in an “original, eccentric, and queer sight” (43). Taking note of the advantages of postponing identifications, the thesis stands its ground on the term ethnopoet. Its abstraction is not dewey-eyed philosophy, but an anticipation of poetic justice, of what’s to come from callused hands. This thesis is divided into 7.5 chapters. The first maps out the ethnopoet’s cartographies of struggle. By revisiting that alleged Tío Tomas, Richard Rodriguez, we unearth the tensions that negatively, deny citizenship to one silo, but on the flipside, engender manifold ways of seeing, hearing, and moving . The second, through George Jackson’s prison memoirs, pans out from this ethnography of power, groping for an apparatus that feigns an impervious prestige: ‘the aesthetic regime of coercion.’ In half-way cut, the thesis sidesteps to spic into existence, formally announcing, through Aime Cesaire, myself, and Pedro Pietri, the poeticization of trauma. Such uplift denies New Age transcendence of self, but a rehearsal of our entrapment in these mortal envelopes. Thirdly, conscious of the bleeding ethnic body, we cut open the incipient corpse to observe her pathologist. Her native autopsies offer the ethnic body’s posthumous recognition, the ethnopoetics ability to speak for and through the dead. Chapter five examines prolific black artists—Beyonce and Kendrick Lamar—to elide the circumvention of their consumption via invoking radical black hi/her-stories, ones fragmenting the black body. Sixth, the paper compares the Black Power Salute of the 1968 Mexico City Olympics to Duke’s Mi Gente Boycott of their Latino Student Recruitment Weekend. Both wielded “silent gestures,” that shrewdly interfered with white noise of numbed negligence. Finally, ‘taking the mask off’ that are her functionalities, the CODA expounds on ethnopoet’s interiority, particularly after the rapid re-calibration of her politics. Through a rerun of El Chavo del Ocho, one of Mexican television’s most cherished shows, we tune into the heart-breaking indigence of barrio residents, only to marvel at the power of humor to, as Friday’s John Witherspoon put it, “fight another day.” This thesis is the tip of my tongue. Y por una vez, déjala que cante.

Updating Beliefs: Are economic agents inspired by rational action or according to ones hopes and fears?.

The purpose of this investigationwas to simulate a real life scenarioand explore the way economicagents update their beliefs. Do theyupdate according to what theyhope? Or do they update inspired byrational behavior?We mimicked the environment whicha recently high school graduate faceswhen entering college to see how astudent updates his beliefs in regardsto his classroom position. We examinedhow economic agents envisagethemselves through and through collegeand see if they update their beliefsabout a hypothesis A in the lightof new evidence B, or if they updatetheir beliefs subject to what theychoose they hope. In this sense weexplored the possibility of setting asidethe neoclassical assumption thatagents are anything more than hyperrational naïve optimizers acting on perfect (and in some cases, limited information)in order to turn back to anolder tradition in economic theory, thatis agents are recognizably human.