Anufriev, M, Arifovic, J, Ledyard, J & Panchenko, V 2022, 'The role of information in a continuous double auction: An experiment and learning model', Journal of Economic Dynamics and Control, vol. 141, pp. 104387-104387.
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We analyze trading in a modified continuous double auction market. We study how more or less information about trading in a prior round affects allocative and informational efficiency. We find that more information reduces allocative efficiency in early rounds relative to less information but that the difference disappears in later rounds. Informational efficiency is not affected by the information differences. We complement the experiment with simulations of the Individual Evolutionary Learning model which, after modifications to account for the CDA, seems to fit the data reasonably well.
Aoyama, H, Di Guilmi, C, Fujiwara, Y & Yoshikawa, H 2022, 'Dual labor market and the “Phillips curve puzzle”: the Japanese experience', Journal of Evolutionary Economics, vol. 32, no. 5, pp. 1419-1435.
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AbstractLow inflation was once welcomed by both policymakers and the public. However, Japan’s experience during the 1990s changed the consensus of economists and central banks around the world regarding prices. Facing deflation and the zero-interest bound at the same time, the Bank of Japan had difficulty conducting an effective monetary policy, making Japan’s stagnation unusually prolonged. The too-low inflation that concerns central banks today translates into the “Phillips curve puzzle.” In the United States and Japan, in the course of the recovery from the Great Recession after the 2008 Global Financial Crisis, the unemployment rate had steadily declined to a level commonly regarded as lower than the natural rate or NAIRU. However, inflation remained low. In this paper, we consider a minimal model of the dual labor market to jointly investigate how the different factors affecting the structural evolution of the labor market have contributed to the observed flattening of the Phillips curve. We find that the level of bargaining power of workers, elasticity of the supply of labor to wage in the secondary market, and composition of the workforce are the main factors jointly explaining the evidence for Japan.
Bajada, C, Agarwal, R, Skellern, K, Luff, S, Soco, S & Green, R 2022, 'Enablers of successful innovation precincts', Regional Studies, Regional Science, vol. 9, no. 1, pp. 732-756.
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Governments worldwide are increasingly focused on promoting innovation activity to generate much needed economic growth. Innovation precincts are seen as providing the strategic opportunity to leapfrog economies and deliver a future competitive advantage. However, there are limited insights into how innovation activity in precincts takes place. In particular, the factors that enable successful innovation precincts, how they are measured and how their locations influence improved economic outcomes. This paper presents an analysis of the important enablers of innovation precincts, with a focus on measuring the relative importance of these enablers and their contribution to innovation and economic outcomes. A novel mixed-methods approach involving the use of a ‘double-blind doubled-scoring’ methodology and analytical hierarchy process (AHP) are applied to score and determine the relative importance of enablers of innovation precincts.
Balzer, B, Rosato, A & von Wangenheim, J 2022, 'Dutch vs. first-price auctions with expectations-based loss-averse bidders', Journal of Economic Theory, vol. 205, pp. 105545-105545.
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We study Dutch and first-price auctions with expectations-based loss-averse bidders and show that the strategic equivalence between these formats no longer holds. Intuitively, as the Dutch auction unfolds, a bidder becomes more optimistic about her chances of winning; this stronger “attachment” effect pushes her to bid more aggressively than in the first-price auction. Thus, Dutch auctions raise more revenue than first-price ones. Indeed, the Dutch auction raises the most revenue among standard auction formats. Our results imply that dynamic mechanisms that make bidders more optimistic raise more revenue, thereby rationalizing the use of descending-price mechanisms by sellers in the field.
Cho, WJ, Hafalir, IE & Lim, W 2022, 'Tie-breaking and efficiency in the laboratory school choice', Journal of Economic Theory, vol. 205, pp. 105546-105546.
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Ciani, E, Delavande, A, Etheridge, B & Francesconi, M 2022, 'Policy Uncertainty and Information Flows: Evidence from Pension Reform Expectations*', The Economic Journal, vol. 133, no. 649, pp. 98-129.
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Abstract We examine how workers’ expectations about pension reform vary with proximity to reforms, information availability and worker characteristics. Using newly collected data, we find that (1) expectations about reform are revised upward by about 10 percentage points in the year prior to a reform, from a median of 50%, regardless of whether the reform is announced; (2) expectations increase more the stronger the media activity about imminent reforms; (3) the effect of information on expectations varies systematically with characteristics that proxy cognitive ability and information value; (4) expectations do not converge as a result of reform announcements or implementations.
Cobb-Clark, DA, Dahmann, SC & Kettlewell, N 2022, 'Depression, Risk Preferences, and Risk-Taking Behavior', Journal of Human Resources, vol. 57, no. 5, pp. 1566-1604.
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Delavande, A, Del Bono, E & Holford, A 2022, 'Academic and non-academic investments at university: The role of expectations, preferences and constraints', Journal of Econometrics, vol. 231, no. 1, pp. 74-97.
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Delavande, A, van der Klaauw, W, Winter, J & Zafar, B 2022, 'Introduction to the Journal of Econometrics Annals Issue on “Subjective Expectations and Probabilities in Economics”', Journal of Econometrics, vol. 231, no. 1, pp. 1-2.
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Di Guilmi, C, Galanis, G & Proaño, C 2022, 'A Baseline Model of Behavioral Political Cycles and Macroeconomic Fluctuations'.
Fehérová, M, Heger, S, Péliová, J, Servátka, M & Slonim, R 2022, 'Increasing autonomy in charitable giving: The effect of choosing the number of recipients on donations', Economics Letters, vol. 217, pp. 110701-110701.
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In many contexts people can choose how many charities to help. This paper presents results from a laboratory experiment that varies whether the subjects have a choice in the number of charities to donate to and whether they are given an option to opt out. We find that the choice increases donation frequency, but does not influence donation amounts. If the choice also includes the opt-out option, there is no increase in the donation frequency or amount.
Girsberger, EM, Koomen, M & Krapf, M 2022, 'Interpersonal, cognitive, and manual skills: How do they shape employment and wages?', Labour Economics, vol. 78, pp. 102235-102235.
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Guilmi, CD & Fujiwara, Y 2022, 'Dual labor market, financial fragility, and deflation in an agent-based model of the Japanese macroeconomy', Journal of Economic Behavior & Organization, vol. 196, pp. 346-371.
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Hafalir, IE, Kojima, F & Yenmez, MB 2022, 'Interdistrict school choice: A theory of student assignment', Journal of Economic Theory, vol. 201, pp. 105441-105441.
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Heger, SA & Slonim, R 2022, 'Giving begets giving: Positive path dependence as moral consistency', Journal of Economic Behavior & Organization, vol. 204, pp. 699-718.
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Heger, SA, Slonim, R & Tausch, F 2022, 'Self-serving dishonesty: The role of confidence in driving dishonesty', Journal of Risk and Uncertainty, vol. 64, no. 3, pp. 235-250.
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AbstractAmbiguity and uncertainty as an explanation for ethical blind spots is well-documented. We contribute to this line of research by showing that these blind spots arise even when there is naturally occurring uncertainty—that is, when individuals are simply uncertain of the truth they “fill-in” this uncertainty in a self-serving way. To examine self-serving dishonesty, we asked a sample of U.S. car owners to respond to an auto insurance underwriting questionnaire that affects their price of insurance (i.e., premium), and investigated how financial incentives affect the honesty of their responses. We find, consistent with the current literature, that people have a strong preference for truthfulness, but only when they are confident of the objective truth. However, when people are not completely certain of the objectively correct answer, significant dishonesty occurs in a self-serving manner. We also find that reports of confidence do not depend on incentives and thus self-serving dishonesty is not strategic.
Henckel, T, Menzies, GD, Moffatt, PG & Zizzo, DJ 2022, 'Belief adjustment: a double hurdle model and experimental evidence', Experimental Economics, vol. 25, no. 1, pp. 26-67.
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AbstractWe present an experiment where subjects sequentially receive signals about the true state of the world and need to form beliefs about which one is true, with payoffs related to reported beliefs. We attempt to control for risk aversion using the Offerman et al. (Rev Econ Stud 76(4):1461–1489, 2009) technique. Against the baseline of Bayesian updating, we test for belief adjustment underreaction and overreaction and model the decision making process of the agent as a double hurdle model where agents with inferential expectations first decide whether to adjust their beliefs and then, if so, decide by how much. We also test the effects of increased inattention and complexity on belief updating. We find evidence for periods of belief inertia interspersed with belief adjustment. This is due to a combination of random belief adjustment; state-dependent belief adjustment, with many subjects requiring considerable evidence to change their beliefs; and quasi-Bayesian belief adjustment, with aggregate insufficient belief adjustment when a belief change does occur. Inattention, like complexity, makes subjects less likely to adjust their stated beliefs, while inattention additionally discourages full adjustment.
Johar, M, Johnston, DW, Shields, MA, Siminski, P & Stavrunova, O 2022, 'The economic impacts of direct natural disaster exposure', Journal of Economic Behavior & Organization, vol. 196, pp. 26-39.
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We estimate the economic impacts of having your home damaged or destroyed by a natural disaster. Regressions with individual, area and time fixed-effects, indicate that experiencing a natural disaster has no impact on employment and income, but substantial impacts on financial hardship and risk aversion. Impacts are particularly large for smaller isolated disasters, which attract little government support. Conversely, impacts of residing in a disaster zone without experiencing residential destruction are small. Using a Group Fixed Effects estimator, we find predictors of financial vulnerability to destruction include age, parenthood, illness, and social support. These results can help improve the allocation of government assistance after future disasters.
Kennedy, T & Siminski, P 2022, 'Are We Richer than Our Parents Were? Absolute Income Mobility in Australia*', Economic Record, vol. 98, no. 320, pp. 22-41.
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We conduct the first dedicated study of absolute income mobility in Australia for the period 1950–2019. Approximately two‐thirds of 30–34‐year‐olds have higher real incomes than their parents did at the same age, and this has been stable for 25 years. This is a high level of mobility among countries where estimates are available. Nevertheless, mobility has declined. Over 80 per cent of baby boomers had higher incomes than their parents. Some two‐thirds of this decline is due to lower income growth. The remainder is due to rising inequality. The mobility estimate is higher (78 per cent) when income is adjusted (equivalised) for family size.
Kettlewell, N & Lam, J 2022, 'Retirement, social support and mental well-being: a couple-level analysis', The European Journal of Health Economics, vol. 23, no. 3, pp. 511-535.
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Social support is increasingly acknowledged as an important resource for promoting well-being. We test whether social support changes around retirement. We also examine whether social support moderates dynamics in mental well-being around retirement and consider both own and spouse's retirement drawing on a unique longitudinal, couple-level data set from Australia. We observe descriptively no effect of own or spouse's retirement on social support. However, those with high social support do experience a small but statistically significant improvement in mental well-being post retirement. Using pension eligibility as an instrument, we find that own retirement causally improves mental well-being for women and by a similar degree for those with low/high social support. We also estimate responses to life satisfaction and find evidence that spill-over benefits from spousal retirement are larger for individuals with low social support.
Körpeoğlu, E, Korpeoglu, CG & Hafalır, İE 2022, 'Parallel Innovation Contests', Operations Research, vol. 70, no. 3, pp. 1506-1530.
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Crowdsourcing using innovation contests has become a popular tool to source innovative solutions to various problems organizations face. With several innovation contests that run in parallel, two key questions are how the number of contests affects contest outcomes and whether solvers who can compete in these contests should focus their effort on a small group of contests. A recent study by Ersin Körpeoğlu, C. Gizem Korpeoglu, and İsa Emin Hafalır titled “Parallel Innovation Contests” addresses these key questions. The study shows that running up to a certain number of contests in parallel can benefit the overall outcome of these contests. Interestingly, more contests can be run in parallel if these contests seek disruptive innovation rather than incremental innovation. The study also shows that encouraging solvers to work on multiple contests in parallel can improve contest outcomes when these contests seek disruptive innovation. These findings can help guide organizations and crowdsourcing platforms that organize multiple contests in parallel.
Li, M & Mendieta-Muñoz, I 2022, 'Bayesian analysis of structural correlated unobserved components and identification via heteroskedasticity', Studies in Nonlinear Dynamics & Econometrics, vol. 26, no. 3, pp. 337-359.
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Abstract We propose a structural representation of the correlated unobserved components model, which allows for a structural interpretation of the interactions between trend and cycle shocks. We show that point identification of the full contemporaneous matrix which governs the structural interaction between trends and cycles can be achieved via heteroskedasticity. We develop an efficient Bayesian estimation procedure that breaks the multivariate problem into a recursion of univariate ones. An empirical implementation for the US Phillips curve shows that our model is able to identify the magnitude and direction of spillovers of the trend and cycle components both within-series and between-series.
Olliff, L, Baak, M, Baddeley, M, Lino Lejukole, J, Munyonge, E, Saidi, I & Treuren, GJM 2022, '“We will start building from that”: Social capital, social networks and African migrants’ job‐seeking experiences in Australia', Australian Journal of Social Issues, vol. 57, no. 3, pp. 725-742.
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AbstractThis article explores the job‐seeking experiences of Black African migrants in South Australia, focussing on the role played by social networks in labour market integration. While it has been long held that “who you know” matters when finding work, the quality and nature of interpersonal connections that can be put to use for job‐seeking purposes suggests that not all networks effectively leverage social capital when it comes to employment. This article argues that Africa‐born migrants in South Australia are a small, diverse population whose experiences of labour market integration are mediated by both reception (how they are received and perceived) and strategy and choice (decisions made by migrants themselves). There is evidence of these migrants’ evolving and expanding social networks; however, the strategy of building the “right” social networks only goes part‐way to addressing employment gaps, while racialised social hierarchies are embedded in the Australian labour market.
Shi, S, Zhang, H & Zhang, J 2022, 'The impact of a home purchase restrictions (HPR) policy on the distressed property market in Beijing', Journal of Housing Economics, vol. 58, pp. 101877-101877.
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Distressed property sales, which are carried out under court order by online auction, have increased rapidly in China in recent years. We examine how the implementation of home purchase restrictions (HPR) by the Chinese government in 2017 has affected the market for distressed properties in Beijing. We first use a stylized second-price auction model to derive theoretical predictions for how HPR should impact the number of auction entrants, auction prices/premia, and auction bidders’ average willingness to pay. We then test those predictions using data on court sales from the Taobao online auction platform from 2015 to 2018. By comparing legal auctions of housing before and after April 2017, we obtain empirical results consistent with the model's predictions. Specifically, our analysis documents that auction entrants fell by approximately 70% and auction premia by 16%–27% after the HPR policy was implemented. Furthermore, the average bidder's willingness to pay relative to the seller's valuation fell from 80% to 40%, which suggests that bidders who were affected by HPR had higher valuations, on average, than bidders who weren't.
Siminski, P & Yetsenga, R 2022, 'Specialization, Comparative Advantage, and the Sexual Division of Labor', Journal of Labor Economics, vol. 40, no. 4, pp. 851-887.
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Siminski, P & Yu, SHT 2022, 'The Correlation of Wealth Between Parents and Children in Australia', Australian Economic Review, vol. 55, no. 2, pp. 195-214.
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AbstractWe present the first estimates of intergenerational wealth mobility for Australia. The rank correlation is 0.253, compared to 0.306 for the United States using comparable methods. This correlation varies greatly by child age when wealth is observed, from 0.1 before age 30, to 0.5 after age 40. This sharp increase with age is stronger than for other countries, is not explained by sample selection bias and is not specific to particular types of wealth. We also argue that neither income mobility nor wealth mobility, as operationalised in empirical work, align neatly with the wealth concept in the Becker & Tomes framework.
