Economics - Research Publications
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ItemGrading Journals in Economics: The ABCs of the ABDC( 2018-01-01)
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ItemInefficient policies and incumbency advantage( 2007-06)We study incumbency advantage in a dynamic game with incomplete information between an incumbent and a voter. The incumbent knows the true state of the world, e.g., the severity of an economic recession or the level of criminal activities, and can choose the quality of his policy. This quality and the state of the world determine the policy outcome, i.e., the economic growth rate or the number of crimes committed. The voter only observes the policy outcome and then decides whether to reelect the incumbent or not. Her preferences are such that she would reelect the incumbent under full information if and only if the state of the world is above a given threshold level. In equilibrium, the incumbent is reelected in more states of the world than he would be under full information. In particular, he chooses inefficient policies and generates mediocre policy outcomes whenever the voter's induced belief distribution will be such that her expected utility of reelecting the incumbent exceeds her expected utility of electing the opposition candidate. Hence, there is an incumbency advantage through ine±cient policies. We provide empirical evidence consistent with the prediction that reelection concerns may induce incumbents to generate mediocre outcomes
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ItemFalse alarm? terror alerts and reelection( 2007)We study a game with asymmetric information to analyze whether an incumbent can improve his reelection prospects using distorted terror alerts. The voters’ preferred candidate depends on the true terror threat level, and the voters are rational and therefore aware of the incumbent’s incentive to distort alerts. In equilibrium, a moderately “Machiavellian” incumbent reports low and high threat levels truthfully, but issues the same distorted alert for a range of intermediate threat levels. He thereby ensures his reelection for some threat levels at which he would not be reelected under full information.
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ItemAn Analysis of the Questions on University Teaching Surveys and the Universities that Use Them: The Australian Experience( 2007-05)This paper is the first attempt to perform an analysis of the internal Quality of TeachingSurveys (QTS) used in all Australian Universities by investigating how they compareacross Universities. We categorize the questions on each university’s QTS into one of 18types and then define a proximity measure between the surveys. We then use anagglomerative cluster analysis to establish groupings of these institutions on the basis ofthe similarity of their QTSs as well as groupings of question types by their frequency ofuse. In addition, we also determine if the form of the survey is related to the responsesrecorded by the Course Evaluation Questionnaire (CEQ) that is administered to allgraduates of Australian Universities. This was done by the use of regression analysis toestablish if the form of the questionnaire is related to the overall good teaching scoresearned by the universities from the CEQ..
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ItemCooperative R&D under uncertainty with free entry( 2007-08)In the last few decades, the effects of cooperative R&D arrangements on innovation andwelfare have played an important role in policy making. The goal of this paper is to analyzethe effects of cooperative R&D arrangements in a model with a stochastic R&D process andoutput spillovers. Our main innovation is to allow for free entry in both the R&D race andthe product market. To determine the desirability of cooperation in R&D environments,we compare three different ways of organizing R&D activities: R&D competition, R&Dcartels, and RJV cartels. In contrast with the literature, we assume that cooperative R&Darrangements do not have to include all of the firms in the industry. We show that sharingof research outcomes is a necessary condition for the profitability of cooperative R&Darrangements with free entry. The profitability of RJV cartels depends on their size. Theimpact of cooperative R&D arrangements on the aggregate level of innovation depends onwhether there are participants in the R&D race who are a part of the cooperative R&Darrangement. If some outsiders choose to participate in the R&D race, the aggregate rate ofinnovation remains unaffected by the formation of a cooperative R&D arrangement. Otherwise,it increases. R&D cartels may be welfare-improving in cases when they cause theaggregate rate of innovation to increase. In such cases, it may be desirable to subsidizethem. Since sharing of R&D outcomes affects the equilibrium number of firms in the productmarket after the R&D race, the consumer welfare effects of RJV cartels are sensitiveto the specification of consumer preferences. Subsidies may be desirable in cases of largerRJVs since they are the ones which are less likely to be profitable.
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ItemRock-paper-scissors; a new and elegant proof( 2007-09)I provide an elegant proof identifying the unique mixed Nash equilibriumof the Rock-Paper-Scissors game. The proof is based on intuitionrather than elimination of cases. It shows that for any mixedstrategy other than the one that puts equal probability on each of aplayer’s actions, it holds that this strategy is not a best response toany mixed strategy that is a best response to it.
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ItemChoosing longevity with overlapping generations( 2007-09)We extend Diamond’s (1965) OLG model to allow agents to choose whether toparticipate in the second period of life. The valuation of early exit (x) is a keyparameter. We characterize competitive equilibria, efficient allocations, andpredictions for income and life expectancy over time. We find that, with logarithmicutility, for any value of x, there is a range of initial values of the capital stock forwhich some agents would prefer to exit in equilibrium. The shape of the transitionfunction and the number of steady state equilibria depend crucially on the value ofcapital’s share of income.