Open Access. Powered by Scholars. Published by Universities.®

Economic Theory Commons

Open Access. Powered by Scholars. Published by Universities.®

2,191 Full-Text Articles 1,769 Authors 628,547 Downloads 142 Institutions

All Articles in Economic Theory

Faceted Search

2,191 full-text articles. Page 1 of 63.

A Way To Resolve Intergenerational Conflict Over The Environment Under The Pareto Criterion Using Green Bonds, Torben M. Andersen, Joydeep Bhattacharya, Pan Liu 2019 University of Aarhus

A Way To Resolve Intergenerational Conflict Over The Environment Under The Pareto Criterion Using Green Bonds, Torben M. Andersen, Joydeep Bhattacharya, Pan Liu

Joydeep Bhattacharya

Any policy designed to combat climate change will likely create intergenerational winners and losers because the associated costs appear up-front while the benefits come downstream. In such cases, cost benefit analysis seeks potential Pareto-improvements in the Kaldor–Hicks sense, the hypothetical potential for the winners to compensate the losers. Of course, once the policy is indeed implemented and has unleashed distortions and general-equilibrium effects, such potential improvements may not lead to actual improvements. We ask, which policies, once implemented, would pass the Pareto test that no generation subsequent to policy action be made worse off than before. We study a ...


The Role Of Income Inequality As A Predictor Of Per Capita Gross Domestic Product, Daniel Friedberg 2019 University of Lynchburg

The Role Of Income Inequality As A Predictor Of Per Capita Gross Domestic Product, Daniel Friedberg

Student Scholar Showcase

The role of income inequality in relation to gross domestic product is of great importance in modern time. Income inequality is a pressing phenomenon in the fields of economics, politics, and sociology, while Gross Domestic Product is the benchmark statistic in measuring the health of any economy. But how well does income inequality serve as a predictor for the level of Purchasing Power Parity (PPP) GDP per capita within a nation? This cross-sectional study determines that the GINI Index has no significant statistical relationship with PPP GDP per capita level. While income inequality is a major economic variable that contributes ...


Do Economic Inequalities Affect Long-Run Cooperation & Prosperity?, Gabriele Camera, Cary Deck, David Porter 2019 Chapman University

Do Economic Inequalities Affect Long-Run Cooperation & Prosperity?, Gabriele Camera, Cary Deck, David Porter

ESI Working Papers

We explore if fairness and inequality motivations affect cooperation in indefinitely repeated games. Each round, we randomly divided experimental participants into donor-recipient pairs. Donors could make a gift to recipients, and ex-ante earnings are highest when all donors give. Roles were randomly reassigned every period, which induced inequality in ex-post earnings. Theoretically, income-maximizing players do not have to condition on this inequality because it is payoff-irrelevant. Empirically, payoff-irrelevant inequality affected participants’ ability to coordinate on efficient play: donors conditioned gifts on their own past roles and, with inequalities made visible, discriminated against those who were better off.


The Political Economy Of Foreign Aid And Growth: Theory And Evidence, Sultan Mehmood, Avner Seror 2019 University of Paris

The Political Economy Of Foreign Aid And Growth: Theory And Evidence, Sultan Mehmood, Avner Seror

ESI Working Papers

In this paper, we demonstrate that even when foreign aid is used to fund patronage, it may still have a positive - and significant - effect on economic growth in developing countries. First, we present a theory that formalizes the effect of aid on economic growth and patronage. Next, we provide evidence from Pakistan consistent with the predictions of the model that foreign aid increases economic growth, despite being used for patronage. The identification strategy we propose allows us to provide causal evidence for the predictions of the model.


Designing Call Auction Institutions To Eliminate Price Bubbles: Is English Dutch The Best?, Cary Deck, Maroš Servátka, Steven Tucker 2019 Chapman University

Designing Call Auction Institutions To Eliminate Price Bubbles: Is English Dutch The Best?, Cary Deck, Maroš Servátka, Steven Tucker

ESI Working Papers

The bubble and burst pattern in asset market experiments is among the most replicable results in experimental economics. Numerous studies have searched for means to reduce this mispricing. Using controlled laboratory experiments, we compare mispricing in standard double auction markets to prices in two clock auctions. The double Dutch auction, shown to be more efficient than the double auction in commodity market experiments, does not eliminate bubbles. However, the English Dutch auction does yield prices reflective of underlying fundamentals and succeeds in taming bubbles even with inexperienced traders in the common declining fundamental value environment.


Thorstein Veblen And The Vested Interests, Lauren Sweger-Hollingsworth 2019 Portland State University

Thorstein Veblen And The Vested Interests, Lauren Sweger-Hollingsworth

Working Papers in Economics

This inquiry seeks to establish the importance of "vested interests" as introduced and relied upon within Thorstein Veblen’s system of reasoning. Veblen considers vested interests from two different perspectives in his 1919 book The Vested Interests and the Common Man. First, Veblen considers the relationships between vested interests and what he terms “the business enterprise”. Veblen takes a historical view, relating vested interests to lingering laws and customs of an old era that continue to be applied in modern times. In addition, Veblen considers vested interests and "the divine right of nations", which he connects to the historical institution ...


Celtic Tiger Ireland As A Case Study In The Practical Application Of Neoliberal Economic Policy, Natalie Sneed 2019 University of Nebraska - Lincoln

Celtic Tiger Ireland As A Case Study In The Practical Application Of Neoliberal Economic Policy, Natalie Sneed

Honors Theses, University of Nebraska-Lincoln

The Celtic Tiger economic boom, which occurred in Ireland from approximately 1987 to 2009 has generally been considered one of the most remarkable economic turnarounds in any country in the modern era. My purpose in this project was to identify the primary causes and effects of such rapid and dramatic economic growth and development to determine whether it is sensible for other countries emerging from colonial rule to seek to emulate the Irish economic model. Through a review of the economic literature on the Irish economy in the last three decades, I identify Ireland’s implementation of a neoliberal economic ...


Salience And Social Choice, Mark Schneider, Jonathan W. Leland 2019 Chapman University

Salience And Social Choice, Mark Schneider, Jonathan W. Leland

ESI Working Papers

The axioms of expected utility and discounted utility theory have been tested extensively. In contrast, the axioms of social welfare functions have only been tested in a few questionnaire studies involving choices between hypothetical income distributions. In this note, we conduct a controlled experiment with 100 subjects in the role of social planners that tests five fundamental properties of social welfare functions to provide a basic test of cardinal social choice theory. We find that four properties of the standard social welfare functions tested are systematically violated, producing an Allais paradox, a common ratio effect, a framing effect, and a ...


A Time To Print, A Time To Reform, Lars Boerner, Jared Rubin, Battista Severgnini 2019 Martin-Luther University of Halle-Wittenberg

A Time To Print, A Time To Reform, Lars Boerner, Jared Rubin, Battista Severgnini

ESI Working Papers

The public mechanical clock and the movable type printing press were two of the most important and complex general purpose technologies of the late medieval period. We document two of their most important, yet unforeseeable, consequences. First, an instrumental variables analysis indicates that towns that were early adopters of clocks were more likely to also be early adopters of presses. We posit that towns with clocks became upper-tail human capital hubs|both technologies required extensive technical know-how that had many points of overlap. Second, a three-stage instrumental variables analysis indicates that the press influenced the adoption of Lutheranism and Calvinism ...


Producer Services: A Hub For Stem And An Engine For Job Growth, Eric Thompson, Uyen Tran 2019 University of Nebraska-Lincoln

Producer Services: A Hub For Stem And An Engine For Job Growth, Eric Thompson, Uyen Tran

Business in Nebraska

The producer services sector, which includes professional and technical services such as accounting, engineering, computer programming, advertising and consulting, is the fastest growing, high-wage segment of the U.S. economy. Producer services employment grew by 15 percent nationwide from 2008 through 2017 but only by 5 percent in Nebraska. Nebraska growth lagged the nation in part because the state has smaller metropolitan areas. Producer service businesses tend to congregate in larger cities. To grasp more opportunities in this growing, high wage sector, Nebraska needs to train more workers in STEM occupations, encourage the development of small businesses in the sector ...


Maximum Likelihood Estimation For The Fractional Vasicek Model, Katsuto TANAKA, Weilin XIAO, Jun YU 2019 Singapore Management University

Maximum Likelihood Estimation For The Fractional Vasicek Model, Katsuto Tanaka, Weilin Xiao, Jun Yu

Research Collection School Of Economics

This paper is concerned about the problem of estimating the drift parameters in the fractional Vasicek model from a continuous record of observations. Based on the Girsanov theorem for the fractional Brownian motion, the maximum likelihood (ML) method is used. The asymptotic theory for the ML estimates (MLE) is established in the stationary case, the explosive case, and the null recurrent case for the entire range of the Hurst parameter, providing a complete treatment of asymptotic analysis. It is shown that changing the sign of the persistence parameter will change the asymptotic theory for the MLE, including the rate of ...


Accounting For The International Quantity-Quality Trade-Off, Juan Carlos Cordoba, Xiying Liu, Marla Ripoll 2019 Iowa State University

Accounting For The International Quantity-Quality Trade-Off, Juan Carlos Cordoba, Xiying Liu, Marla Ripoll

Economics Working Papers

We investigate what accounts for the observed international differences in schooling and fertil- ity, and draw lessons for the underlying sources of cross-country income differences. For this purpose, we extend a life-cycle dynastic model to include features relevant for schooling and fertility choices. Our approach allows for country-specific human capital technologies in addi- tion to differences in TFP, public education policies, and demographic factors. We find that differences in human capital production functions, specifically in the degree of complementarity of educational investments, are key to match schooling data, and result in novel estimates of human capital stocks and TFP levels ...


Endogenous Market Formation And Monetary Trade: An Experiment, Gabriele Camera, Dror Goldberg, Avi Weiss 2019 Chapman University

Endogenous Market Formation And Monetary Trade: An Experiment, Gabriele Camera, Dror Goldberg, Avi Weiss

ESI Working Papers

The theory of money assumes decentralized bilateral exchange and excludes centralized multilateral exchange. However, endogenizing the exchange process is critical for understanding the conditions that support the use of money. We develop a “travelling game” to study the emergence of decentralized and centralized exchange, theoretically and experimentally. Players located on separate islands can either trade locally, or pay a cost to trade elsewhere, so decentralized and centralized markets can both emerge in equilibrium. The former minimize trade costs through monetary exchange; the latter maximizes overall surplus through non-monetary exchange. Monetary trade emerges when coordination is problematic, while centralized trade emerges ...


Slogans Appropriate To The Legacy Of Martin Luther King Jr., Theodore Walker 2019 Southern Methodist University

Slogans Appropriate To The Legacy Of Martin Luther King Jr., Theodore Walker

Perkins Faculty Research and Special Events

For printing signs, banners, posters, tee shirts, and bumper stickers (and for preaching sermons) that are appropriate to the legacy of Rev. Dr. Martin Luther King Jr., please consider the following slogans: ABOLISH WAR, ABOLISH POVERTY, AMEND THE CONSTITUTION, SUPPORT AN ECONOMIC BILL OF RIGHTS, JOBS FOR ALL, GUARANTEED INCOME FOR ALL, SUPPORT UNIVERSAL BASIC INCOME, and GOOD NEWS TO THE POOR - Luke 4:14-19.


Notes On The Gridlab-D Household Equivalent Thermal Parameter Model, Leigh Tesfatsion, Swathi Battula 2019 Iowa State University

Notes On The Gridlab-D Household Equivalent Thermal Parameter Model, Leigh Tesfatsion, Swathi Battula

Economics Working Papers

GridLab-D (GLD) is an agent-based platform, developed by researchers at Pacific Northwest National Laboratory, that permits users to accurately simulate the state dynamics of power distribution systems at time scales ranging from sub-seconds to years. The purpose of this study is to present, in careful comprehensive form, a complete analytical state-space control representation for a version of the GLD Household Equivalent Thermal Parameter Model as support documentation for model users. This model is a physically-based implementation of a household with multiple price-responsive and conventional appliances whose thermal dynamics are determined over successive days by resident appliance usage and external weather ...


A Bias Aggregation Theorem, Mark Schneider 2019 Chapman University

A Bias Aggregation Theorem, Mark Schneider

ESI Working Papers

In a market where some traders are rational (maximize expected utility) and others are systematically biased (deviate from expected utility due to some bias parameter, q), do equilibrium prices necessarily depend on q? In this note, focusing on the case where there is an aggregate and systematic bias in the population, we show that market prices can still be unbiased. Hence, we establish that systematically biased agents do not necessarily imply biased market prices. We show that the parametric model we use also predicts observed deviations from expected utility in laboratory and market environments.


Cooperation Among Strangers With And Without A Monetary System, Maria Bigoni, Gabriele Camera, Marco Casari 2019 University of Bologna

Cooperation Among Strangers With And Without A Monetary System, Maria Bigoni, Gabriele Camera, Marco Casari

ESI Working Papers

Human societies prosper when their members move beyond local exchange and cooperate with outsiders in the creation of wealth. Collaboration of this type presents formidable challenges because interaction is impersonal, reciprocity is unfeasible and trust cannot be easily established. Here we study this cooperation problem by modeling strategic interaction among strangers through an Intertemporal Exchange Game. The setup can be easily implemented in the laboratory to study a variety of cooperation-enhancing institutions. In particular, we study the role of a fiat monetary system by introducing intrinsically worthless tokens that can be offered in exchange for cooperation. The experiments show that ...


An Examination Of The Stock Market's Effect On Economic Inequality, Nicholas Golina 2019 The University of Akron

An Examination Of The Stock Market's Effect On Economic Inequality, Nicholas Golina

Williams Honors College, Honors Research Projects

The economic literature on economic inequality has shown that it can negatively impact aggregate demand because it indicates a higher concentration of wealth in the hands of the top 10% as opposed to the poor and middle class, who are more likely to consume. The literature has identified many factors that can lead to increasing inequality. The stock market could be one of those factors since it can either create an upward redistributive effect towards the top 10% or redistributive effect towards the middle class. This paper tested the effect of the stock market on inequality. This study contributes to ...


Is Antitrust's Consumer Welfare Principle Imperiled?, Herbert J. Hovenkamp 2019 University of Pennsylvania Law School

Is Antitrust's Consumer Welfare Principle Imperiled?, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Antitrust’s consumer welfare principle stands for the proposition that antitrust policy should encourage markets to produce output as high as is consistent with sustainable competition, and prices that are accordingly as low. Such a policy does not protect every interest group. For example, it opposes the interests of cartels or other competition-limiting associations who profit from lower output and higher prices. It also runs counter to the interest of less competitive firms that need higher prices in order to survive. Market structure is relevant to antitrust policy, but its importance is contingent rather than absolute – that is, market structure ...


A Full Characterization Of Best-Response Functions In The Lottery Colonel Blotto Game, Dan Kovenock, David Rojo Arjona 2019 Chapman University

A Full Characterization Of Best-Response Functions In The Lottery Colonel Blotto Game, Dan Kovenock, David Rojo Arjona

ESI Working Papers

We fully characterize best-response functions in Colonel Blotto games with lottery contest success functions.


Digital Commons powered by bepress