We provide the first revealed preference estimates of the benefits of routine weather forecasts. The benefits come from how people use advance information to reduce mortality from heat and cold. Theoretically, more accurate forecasts reduce mortality if and only if mortality risk is convex in...

Using uncertainty about the future returns to migration, the option value theory of migration can explain low migration rates in spite of huge wage differences. This paper presents the theory in a simple two-period framework and uses ethnic Germans in the CIS to find empirical support for it....

This paper analyzes the tendency of people to choose default options when offered courses to acquire job related skills. We ask a random sample of Dutch people aged 6-80 which three skills are most important in their (future or past) jobs. Further on in the survey, we randomly select one of the...

Breakthroughs and backlashes have marked progress in the development and diffusion of Artificial Intelligence (AI). These shocks make the investment in developing an Artificial General Intelligence (AGI) subject to considerable uncertainty. This paper applies a real options model, extended to...

Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision-making and risk management -- in both the public and private sectors. This paper outlines five open questions in the literature,...

While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We provide relevant analytic foundations, describing sufficient...

We review the efficacy of three approaches to forecasting elections: econometric models that project outcomes on the basis of the state of the economy; public opinion polls; and election betting (prediction markets). We assess the efficacy of each in light of the 2004 Australian election. This...

The current economic crisis requires fast information to predict economic behavior early, which is difficult at times of structural changes. This paper suggests an innovative new method of using data on internet activity for that purpose. It demonstrates strong correlations between keyword...

This paper empirically analyzes whether the character-based approach, which is based on the personality structure and the human capital of business founders, allows prediction of entrepreneurial success. A unique data set is used consisting of 414 previously unemployed persons whose personal...