| 11. |
- Kocher, Martin G., et al.
(författare)
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Ambiguity aversion is not universal
- 2018
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 101, s. 268-283
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Tidskriftsartikel (refereegranskat)abstract
- Assuming universal ambiguity aversion, an extensive theoretical literature studies how ambiguity can account for market anomalies from the perspective of expected utility-based theories. We provide a systematic experimental assessment of ambiguity attitudes in different likelihood ranges, and in the gain domain, the loss domain and with mixed outcomes. We draw on a unified framework to elicit preferences across these domains. We replicate the usual finding of ambiguity aversion for moderate likelihood gains. However, when introducing losses or lower likelihoods, we observe predominantly ambiguity neutrality or seeking, rejecting universal ambiguity aversion. (C) 2017 Elsevier B.V. All rights reserved.
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| 12. |
- Sato, Yasuhiro, et al.
(författare)
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How urbanization affect employment and social interactions
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 75, s. 131-155
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Tidskriftsartikel (refereegranskat)abstract
- We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium.
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| 13. |
- Cohen, F., et al.
(författare)
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Consumer myopia, imperfect competition and the energy efficiency gap: Evidence from the UK refrigerator market
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 93, s. 1-23
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Tidskriftsartikel (refereegranskat)abstract
- The empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy-using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance. We take a broader view and also consider the impact of imperfect competition. Using data on the UK refrigerator market (2002-2007), we find that the average energy consumption of appliances sold during this period was only 7.2% higher than what would have been observed under a scenario with a perfectly competitive market and non-myopic consumers. One reason for this small gap is that market power actually reduces energy use. (C) 2017 Elsevier B.V. All rights reserved.
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| 14. |
- de la Croix, David, et al.
(författare)
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How far can economic incentives explain the French fertility and education transition?
- 2018
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 108, s. 221-245
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Tidskriftsartikel (refereegranskat)abstract
- We analyze how much a core rational-choice model can explain the temporal and spatial variation in fertility and school enrollment in France during the 19th century. The originality of our approach is in our reliance on the structural estimation of a system of first-order conditions to identify the deep parameters. Another new dimension is our use of gendered education data, allowing us to have a richer theory having implications for the gender wage and education gaps. Results indicate that the parsimonious rational-choice model explains 38 percent of the variation of fertility over time and across counties, as well as 71 percent and 83 percent of school enrollment of boys and girls, respectively. The analysis of the residuals (unexplained by the economic model) indicates that additional insights might be gained by interacting incentives with cross-county differences in family structure and cultural barriers.
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| 15. |
- Esteban, J., et al.
(författare)
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Personal liberties, religiosity, and effort
- 2019
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 120
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we study the role of religiosity in influencing the choice of labor effort. Many religions promote restrictions on personal liberties such as divorce, abortion, gender parity, or gay marriage, often regulated by law. We assume that the higher the degree of religiosity of an individual, the less he enjoys such personal liberties, and the less he likes to be in a society which allows them, while seculars enjoy such liberties. By standard consumer theory, the differential valuation induced by religiosity influences individual decisions on other dimensions as well, notably labour supply. We show empirically that this nexus holds and that the size of the effect is large. Specifically, we construct an index of personal liberties and find solid evidence in support of the joint effect of religiosity and liberties on labor effort. Our empirical results indicate that religiosity interacted with the legal level of liberties has a significant and strong negative effect on labor supply and that increases in the cap on liberties have a negative effect on the labor supply of the religious individuals and positive for the secular. (C) 2019 Published by Elsevier B.V.
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| 16. |
- Gangadharan, Lata, et al.
(författare)
-
Impact of social identity and inequality on antisocial behaviour
- 2019
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 119, s. 199-215
-
Tidskriftsartikel (refereegranskat)abstract
- © 2019 Elsevier B.V. Antisocial behaviour can be observed in response to social comparisons with advantaged others. This paper uses a laboratory experiment to examine if social group affiliation mitigates or increases antisocial behaviour in the presence of inequality. While research has documented the harmful effects of inequality, less is known about how social identity may interact with income inequality to influence antisocial behaviour. In our experiment, participants play a modified version of an investment game in which they can reduce others’ payoff at a cost to themselves. Participants are identified by their income groups and/or social groups. We use naturally occurring and exogenously formed social groups to capture social identity. We find that, in settings where social identity is unknown relative to a setting where social identity is known, low-income participants are more antisocial towards others with the same income identity. We also show that sharing the same social identity mitigates this behaviour. In contrast, there are no differences in the behaviour of high-income participants across the different settings. The targeting of antisocial behaviour by low-income individuals is partially consistent with our theoretical framework and suggests that identity politics causes low-income people who are already in conflict with one another to shift their blame socially. Our findings suggest that the context in which inequality exists may have important effects on antisocial behaviour.
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| 17. |
- Kirchler, Michael, 1977, et al.
(författare)
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The "inflow-effect"-Trader inflow and price efficiency
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 77, s. 1-19
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Tidskriftsartikel (refereegranskat)abstract
- We investigate the impact of cash and trader inflow on price efficiency in multi-period experimental asset markets. Implementing eight treatments with 672 subjects, we find that (i) the joint inflow of cash and traders triggers strong overvaluation and massive price run-ups (inflow-effect). Remarkably, the effect occurs in almost all of the 30 markets with joint cash and trader inflow and is very robust. The effect even prevails in markets with complete and symmetric fundamental information. We further show that (ii) in treatments with the joint inflow of cash and traders, prices crash to fundamentals towards maturity of the asset. The analysis of traders' beliefs reveals that (iii) despite fundamental values staying constant, beliefs about fundamentals co-move with upwardly trending prices. Finally, we report a speculative motive only among the optimists in treatments where we observe the inflow-effect. (C) 2015 Elsevier BM. All rights reserved.
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| 18. |
- Kocher, Martin G., et al.
(författare)
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An experimental study of precautionary bidding
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 78, s. 27-38
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Tidskriftsartikel (refereegranskat)abstract
- Auctions often involve goods exhibiting a common-knowledge ex-post risk. In such auctions, precautionary bidding predicts that under expected utility, DARA bidders reduce their bids by more than the appropriate risk premium. Because the degree of riskiness of an auctioned good and bidders' levels of risk aversion are difficult to observe in field settings, we conduct experimental auctions that allow us to identify the precautionary premium directly. We find strong evidence for precautionary bidding. The effect is robust to changes in experimental design features. Our experiment provides the first empirical demonstration of precautionary motives in a strategic setting. (C) 2015 Elsevier B.V. All rights reserved.
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| 19. |
- Le Coq, Chloé, et al.
(författare)
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On the effects of group identity in strategic environments
- 2015
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Ingår i: European Economic Review. - : Elsevier: 24 months. - 0014-2921. ; 76, s. 239-252
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Tidskriftsartikel (refereegranskat)abstract
- We examine differences in behavior between subjects interacting with a member of either the same or different identity group in both a centipede game and a series of stag hunt games. We find evidence that subjects interacting with outgroup members are more likely to behave as though best-responding to uniform randomization of the partner. We conclude that group identity not only affects player׳s social preferences, as identified in earlier research, but also affects the decision making process, independent of changes in the utility function.
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| 20. |
- Lemoine, Matthieu, et al.
(författare)
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Fiscal consolidation under imperfect credibility
- 2016
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Ingår i: European Economic Review. - : Elsevier: 24 months. - 0014-2921. ; 88:SI, s. 108-141
-
Tidskriftsartikel (refereegranskat)abstract
- This paper examines the effects of expenditure-based fiscal consolidation when credibility as to whether the cuts will be long-lasting is imperfect. We contrast the impact limited credibility has when the consolidating country has the means to tailor monetary policy to its own needs, with the impact when the country is a small member of a currency union with a negligible effect on interest rates and on nominal exchange rates of the currency union. We find two key results. First, in the case of an independent monetary policy, the adverse impact of limited credibility is relatively small, and consolidation can be expected to reduce government debt at a relatively low output cost given that monetary policy provides more accommodation than it would under perfect credibility. Second, the lack of monetary accommodation under currency union membership implies that the output cost may be significantly larger, and that progress in reducing government debt in the short and medium term may be limited under imperfect credibility. (C) 2016 Elsevier B.V. All rights reserved.
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