Title:Decision Makers Facing Uncertainty: Theory Versus Evidence
Author(s):GIORDANI, Paolo E.; SCHLAG, Karl H.; ZWART, SanneDate:2010Type of Publication:ArticleAbstract:This paper aims at assessing cultural differences in uncertainty attitude across Europe. We select questions from the European Values Survey (EVS) capturing salient features of uncertain scenarios (safe versus uncertain, ...
Title:Network Games
Author(s):GALEOTTI, Andrea; GOYAL, Sanjeev; JACKSON, Matthew O.; VEGA-REDONDO, Fernando; YARIV, LeeatDate:2010Type of Publication:ArticleAbstract:In contexts ranging from public goods provision to information collection, a player's well-being depends on his or her own action as well as on the actions taken by his or her neighbours. We provide a framework to analyse ...
Title:Peer Effects and Peer Avoidance: The Diffusion of Behavior in Coevolving Networks
Author(s):FOSCO, Constanza; MARSILI, Matteo; VEGA-REDONDO, FernandoDate:2010Type of Publication:ArticleAbstract:We study the long-run emergence of behavioral patterns in dynamic complex networks. Individuals can display two kinds of behavior: G(good) or B (bad). We assume that the exposure of a G agent to bad behavior on the part ...
Title:Labor-Market Volatility in the Search-And-Matching Model: The Role of Investment-Specific Technology Shocks
Author(s):FACCINI, Renato; ORTIGUEIRA, SalvadorDate:2010Type of Publication:ArticleAbstract:Shocks to investment-specific technology have been identified as a main source of U.S. aggregate output volatility. In this paper, we present a model with frictions in the labor market and explore the contribution of these ...
Title:Banking Panics and Policy Responses
Author(s):ENNIS, Huberto M.; KEISTER, ToddDate:2010Type of Publication:ArticleAbstract:When policy makers have limited commitment power, self-fulfilling bank runs can arise as an equilibrium phenomenon. We study how such banking panics unfold in a version of the Diamond and Dybvig (1983) model. A run in this ...
Title:The 'price puzzle' in the monetary transmission VARs with long-run restrictions
Author(s):KRUSEC, DejanDate:2010Type of Publication:ArticleAbstract:This study addresses the 'price puzzle' - a positive response of prices to monetary tightening in VAR models. By using long-run instead of the usual short-run restrictions on the US data including output, prices and interest ...
Title:Price Variation Antagonism and Firm Pricing Policies
Author(s):COURTY, Pascal; PAGLIERO, MarioDate:2010Type of Publication:ArticleAbstract:Pricing schemes that vary prices in response to demand shocks may antagonize consumers and reduce demand. At the same time, consumers may take advantage of the opportunities offered by price changes. Overall, the net impact ...
Title:Regional Debt in Monetary Unions: Is It Inflationary?
Author(s):COOPER, Russell; KEMPF, Hubert; PELED, DanDate:2010Type of Publication:ArticleAbstract:This paper studies the inflationary implications of interest bearing regional debt in a monetary union. Is this debt simply backed by future taxation with no inflationary consequences? Or will the circulation of region ...
Title:The Determinants of Corporate Risk in Emerging Markets: An Option-Adjusted Spread Analysis
Author(s):CAVALLO, Eduardo A.; VALENZUELA, PatricioDate:2010Type of Publication:ArticleAbstract:This Study explores the determinants of corporate bond spreads in emerging markets economics. Using a largely unexploited data set, the paper finds that corporate bond spreads are determined by firm-specific variables, ...
Title:Changes in the Wage Structure By Types of Contract, 1995-2002
Author(s):MOTELLON, Elisabet; LOPEZ-BAZO, Enrique; EL-ATTAR, MayssunDate:2010Type of Publication:ArticleAbstract:This paper analyses changes in the wage distribution in Spain between 1995 and 2002, using data from the Wage Structure Survey. Results show a modification of the wage distribution over the period under analysis, which ...
Title:Ensuring a Representative Referendum Outcome: The Daunting Task of Setting the Quorum Right
Author(s):ZWART, SanneDate:2010Type of Publication:ArticleAbstract:The majority of the participating voters in referenda does not necessarily reflect the majority of the whole population since voters can abstain. This paper shows that although the quorum can be set such that the outcome ...
Title:Cross-sectional Averaging and Instrumental Variable Estimation with Many Weak Instruments
Author(s):KAPETANIOS, George; MARCELLINO, MassimilianoDate:2010Type of Publication:ArticleAbstract:The present paper suggests a new way to carry out IV estimation with many instruments. Our suggestion is to cross-sectionally average the instruments and use these averages as instruments. We provide a theoretical and Monte ...
Title:Imitation and Selective Matching in Reputational Games
Author(s):VIGNOLO, ThierryDate:2010Type of Publication:ArticleAbstract:This paper investigates imitation and selective matching in reputational games with an outside option. We identify two classes of such games, ultimatum and trust games. By selective matching we mean that short-run players ...
Title:Globalisation and the Spatial Concentration of Production
Author(s):NIEPMANN, Friederike; FELBERMAYR, Gabriel J.Date:2010Type of Publication:ArticleAbstract:(1240) Friederike Niepmann and Gabriel J. Felbermayr In new trade theory (NTT) models, freer trade tends to increase the spatial concentration of industrial production across countries. While nations with large home markets ...
Title:Factor Midas for Nowcasting and Forecasting with Ragged-Edge Data: A Model Comparison For German Gdp*
Author(s):MARCELLINO, Massimiliano; SCHUMACHER, ChristianDate:2010Type of Publication:ArticleAbstract:In this article, we merge two strands from the recent econometric literature. First, factor models based on large sets of macroeconomic variables for forecasting, which have generally proven useful for forecasting. However, ...
Title:Modeling and Forecasting Stock Return Volatility Using a Random Level Shift Model
Author(s):LU, Yang K.; PERRON, PierreDate:2010Type of Publication:ArticleAbstract:We consider the estimation of a random level shift model for which the series of interest is the sum of a short-memory process and a jump or level shift component. For the latter component, we specify the commonly used ...
Title:The Price Puzzle in the Monetary Transmission Vars with Long-Run Restrictions
Author(s):KRUSEC, DejanDate:2010Type of Publication:ArticleAbstract:This study addresses the price puzzle - a positive response of prices to monetary tightening in VAR models. By using long-run instead of the usual short-run restrictions on the US data including output, prices and interest ...
Title:The Option to Leave: Conditional Dissociation in the Evolution of Cooperation
Author(s):IZQUIERDO, Segismundo S.; IZQUIERDO, Luis R.; VEGA-REDONDO, FernandoDate:2010Type of Publication:ArticleAbstract:Conditional dissociation, i.e. the option to leave an interacting partner in response to his behaviour, is a mechanism that has been shown to promote cooperation in several settings, but the fundamental features that make ...
Title:A Functional Coefficient Model View of the Feldstein-Horioka Puzzle
Author(s):HERWARTZ, Helmut; XU, FangDate:2010Type of Publication:ArticleAbstract:What does the saving-investment (SI) relation really measure and how should the SI relation be measured? These are two of the most discussed issues triggered by the so-called Feldstein-Horioka puzzle. Based on panel data ...