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How prediction markets can save event studies

Snowberg, Erik; Wolfers, Justin; Zitzewitz, Eric - 2011

This review paper articulates the relationship between prediction market data and event studies, with a special focus on applications in political economy. Event studies have been used to address a variety of political economy questions - from the economic effects of party control of government...

Persistent link: https://www.econbiz.de/10010274808

Technological determinants of the group-size paradox

Kolmar, Martin; Rommeswinkel, Hendrik - 2011

The present paper analyzes situations in which groups compete for rents. A major result in the literature has been that there are both cases where larger groups have advantages and cases where they have disadvantages. The paper provides two intuitive criteria which for groups with homogenous...

Persistent link: https://www.econbiz.de/10010274810

Political competition and Mirrleesian income taxation: A first pass

Bierbrauer, Felix J.; Boyer, Pierre C. - 2010

We study Downsian competition in a Mirrleesian model of income taxation. The competing politicians may differ in competence. If politicians engage in vote-share maximization, the less competent politician's policy proposals are attractive to the minority of rich agents, whereas those of the...

Persistent link: https://www.econbiz.de/10010274813

Commodity tax structure under uncertainty in a perfectly competitive market

Goerke, Laszlo - 2011

In a partial equilibrium setting without price uncertainty, the balanced-budget substitution of an ad valorem tax on output for a specific (unit) tax can enhance welfare in imperfectly competitive markets and is without impact in a competitive world. This paper demonstrates that a substitution...

Persistent link: https://www.econbiz.de/10010274816

The empirics of general equilibrium trade theory: What have we learned?

Bernhofen, Daniel - 2010

data. Three lessons stand out. First, competitive and new trade theory models are complementary rather than competing ways …

Persistent link: https://www.econbiz.de/10010274817

The impact of financial market frictions on trade flows, capital flows and economic development

Bougheas, Spiros; Falvey, Rod - 2011

We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in...

Persistent link: https://www.econbiz.de/10010274820

Higher order expectations, illiquidity, and short-term trading

Cespa, Giovanni; Vives, Xavier - 2011

We propose a theory that jointly accounts for an asset illiquidity and for the asset price potential over-reliance on … Order Expectations (HOEs) about the two factors that influence the aggregate demand: fundamentals information and liquidity … HOEs about fundamentals are subdued, prices under-rely on public information, the market hovers in a high liquidity state …

Persistent link: https://www.econbiz.de/10010274821

Asymmetric taxation and performance-based incentive contracts

Niemann, Rainer - 2011

This paper analyzes the effects of symmetric and asymmetric taxation on performance-based versus fixed remuneration contracts. I integrate a proportional corporation tax and a proportional wage tax into a binary principal-agent model. The wage tax increases the remuneration costs and makes the...

Persistent link: https://www.econbiz.de/10010274823

Selection biases in complementary R&D projects

Choi, Jay Pil; Gerlach, Heiko - 2011

This paper analyzes selection biases in the project choice of complementary technologies that are used in combination to produce a final product. In the presence of complementary technologies, patents allow innovating firms to hold up rivals who succeed in developing other system components....

Persistent link: https://www.econbiz.de/10010274825

The cult of statistical significance

Krämer, Walter - 2010

This article takes issue with a recent book by Ziliak and McCloskey (2008) of the same title. Ziliak and McCloskey argue that statistical significance testing is a barrier rather than a booster for empirical research in many fields and should therefore be abandoned altogether. The present...

Persistent link: https://www.econbiz.de/10010274828