In a discrete setting, we develop a model for pricing a contingent claim. Since the presence of hedging opportunities influences the price of a contingent claim, first we introduce the optimal hedging strategy assuming a contingent claim has been issued: a strategy implemented by investing the...

We describe in this paper a variance reduction method based on control variates. The technique uses the fact that, if all stochastic assets but one are replaced in the payoff function by their mean, the resulting integral can most often be evaluated in closed form. We exploit this idea by...

There is very little evidence on the effects of the minimum wage on prices in the international literature and none whatsoever for developing countries. This paper analyzes the effects of the minimum wage on prices using monthly Brazilian household and price data from 1982 to 2000 aggregated at...

A key area of focus in the economic reform process and the design of a favorable business environment is labor market legislation. Montenegro has obviously failed in this area. After nearly 13 years since the beginning of the transition process, or five years since the beginning of Economic...

In many countries the shadow employment has a very high priority among policymakers. A new time series for this component of the labour market has been recently released by the Italian institute of statistics. Taken together they give the motivation and the occasion for a fresh analysis of the...

Using an econometric procedure that corrects for both self-selection of individuals into their preferred compensation scheme and wage endogeneity, this study investigates whether significant differences exist in the job satisfaction of individuals receiving performance- related pay (PRP)...

Instrumental variables (IV) estimates of the effect of fertility on female labor supply have only been able to identify the causal effect of second and higher-parity children. This study uses exogenous variation in fertility caused by the Chinese lunar calendar to identify the effect of the...