Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112033
Michael Hatcher
We show that a two-part pension system provides optimal capital accumulation without distorting labour supply, thereby achieving the first-best. An economy with too little retirement saving should combine a negative income tax with a consumption tax to replicate the first-best allocation without using any lump-sum taxes. Our results are shown in a classic Diamond overlapping generations model that is augmented with endogenous labour supply on the intensive margin.
{"title":"Optimal pensions with endogenous labour supply","authors":"Michael Hatcher","doi":"10.1016/j.econlet.2024.112033","DOIUrl":"10.1016/j.econlet.2024.112033","url":null,"abstract":"<div><div>We show that a two-part pension system provides optimal capital accumulation without distorting labour supply, thereby achieving the <em>first-best</em>. An economy with too little retirement saving should combine a <em>negative</em> income tax with a consumption tax to replicate the first-best allocation without using any lump-sum taxes. Our results are shown in a classic Diamond overlapping generations model that is augmented with endogenous labour supply on the intensive margin.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112033"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142551876","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using Li et al.’s (2021b) culture dictionary, developed through word embedding technique, we study the impact of corporate innovation culture on the ESG performance of firms. We focus on Thai's companies, since Thailand's unique economic and cultural contexts provide key insights into how innovation culture affects ESG performance in emerging markets. Consistent with the institutional, stakeholder and legitimacy hypotheses, we find that a one-unit standard deviation increase in innovation culture is significantly associated with 21.1% rise in ESG scores. This finding, robust across various econometric tests, underscores the importance of innovation culture in shaping corporate sustainability in emerging markets.
{"title":"Corporate innovation culture and ESG: Evidence from textual analysis in emerging market","authors":"Tanakorn Likitapiwat , Stefano Starita , Sirimon Treepongkaruna , Kam Fong Chan","doi":"10.1016/j.econlet.2024.112047","DOIUrl":"10.1016/j.econlet.2024.112047","url":null,"abstract":"<div><div>Using Li et al.’s (2021b) culture dictionary, developed through word embedding technique, we study the impact of corporate innovation culture on the ESG performance of firms. We focus on Thai's companies, since Thailand's unique economic and cultural contexts provide key insights into how innovation culture affects ESG performance in emerging markets. Consistent with the institutional, stakeholder and legitimacy hypotheses, we find that a one-unit standard deviation increase in innovation culture is significantly associated with 21.1% rise in ESG scores. This finding, robust across various econometric tests, underscores the importance of innovation culture in shaping corporate sustainability in emerging markets.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112047"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142578157","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112037
Toan Le
I extend Condorelli’s lower bound on monopoly profit from log-concave demand to a broader class of -concave demand, with corresponding to log-concavity and to concavity. The monopoly profit is at least of the area under the demand curve. I further derive upper bounds for consumer surplus and deadweight loss relative to monopoly profit and show all three bounds are sharp.
{"title":"Robust lower bounds on monopoly profit with α-concave demand","authors":"Toan Le","doi":"10.1016/j.econlet.2024.112037","DOIUrl":"10.1016/j.econlet.2024.112037","url":null,"abstract":"<div><div>I extend Condorelli’s lower bound on monopoly profit from log-concave demand to a broader class of <span><math><mi>α</mi></math></span>-concave demand, with <span><math><mrow><mi>α</mi><mo>=</mo><mn>0</mn></mrow></math></span> corresponding to log-concavity and <span><math><mrow><mi>α</mi><mo>=</mo><mn>1</mn></mrow></math></span> to concavity. The monopoly profit is at least <span><math><mfrac><mrow><mn>1</mn></mrow><mrow><msup><mrow><mrow><mo>(</mo><mn>1</mn><mo>+</mo><mi>α</mi><mo>)</mo></mrow></mrow><mrow><mn>1</mn><mo>/</mo><mi>α</mi></mrow></msup></mrow></mfrac></math></span> of the area under the demand curve. I further derive upper bounds for consumer surplus and deadweight loss relative to monopoly profit and show all three bounds are sharp.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112037"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142551879","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112032
Lisa Bruttel, Vasilisa Werner
This paper explores one channel in which communication facilitates cooperation — belief precision. A prisoner’s dilemma experiment shows that communication not only promotes optimism about the partner’s cooperation but also increases the precision of this belief, thereby reducing strategic uncertainty.
{"title":"Does communication increase the precision of beliefs?","authors":"Lisa Bruttel, Vasilisa Werner","doi":"10.1016/j.econlet.2024.112032","DOIUrl":"10.1016/j.econlet.2024.112032","url":null,"abstract":"<div><div>This paper explores one channel in which communication facilitates cooperation — belief precision. A prisoner’s dilemma experiment shows that communication not only promotes optimism about the partner’s cooperation but also increases the precision of this belief, thereby reducing strategic uncertainty.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112032"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142555689","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112035
Natsuki Arai , Nobuo Iizuka , Yohei Yamamoto
This paper evaluates the efficiency of the Japanese fiscal authority’s revenue projections using real-time data from 1960 to 2022. While their one-year-ahead projections are not efficient, their accuracy can be significantly improved by adjusting the forecasts based on the results.
{"title":"The efficiency of the Japanese government’s revenue projections","authors":"Natsuki Arai , Nobuo Iizuka , Yohei Yamamoto","doi":"10.1016/j.econlet.2024.112035","DOIUrl":"10.1016/j.econlet.2024.112035","url":null,"abstract":"<div><div>This paper evaluates the efficiency of the Japanese fiscal authority’s revenue projections using real-time data from 1960 to 2022. While their one-year-ahead projections are not efficient, their accuracy can be significantly improved by adjusting the forecasts based on the results.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112035"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142555688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112036
Christopher P. Chambers , Georgios Gerasimou
Diversification is the typical investment strategy of risk-averse agents. However, non-diversified positions that allocate all resources to a single asset, state of the world or revenue stream are common too. We show that whenever finitely many non-diversified demands under uncertainty are compatible with risk-averse subjective expected utility maximization under strictly positive beliefs, they are also rationalizable under the same beliefs by many qualitatively distinct risk-averse as well as risk-neutral and risk-seeking preferences.
{"title":"Non-diversified portfolios with subjective expected utility","authors":"Christopher P. Chambers , Georgios Gerasimou","doi":"10.1016/j.econlet.2024.112036","DOIUrl":"10.1016/j.econlet.2024.112036","url":null,"abstract":"<div><div>Diversification is the typical investment strategy of risk-averse agents. However, non-diversified positions that allocate all resources to a single asset, state of the world or revenue stream are common too. We show that whenever finitely many non-diversified demands under uncertainty are compatible with risk-averse subjective expected utility maximization under strictly positive beliefs, they are also rationalizable under the same beliefs by many qualitatively distinct risk-averse as well as risk-neutral and risk-seeking preferences.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112036"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142551878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112031
Joseph D. Nedved, Amir B. Ferreira Neto
The repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018 resulted in the rapid introduction of sports betting into many U.S. markets. This study investigates the introduction of sports betting in Pennsylvania. We explore the staggered implementation of sports betting across casinos in Pennsylvania to analyze the impact of sports betting on slot gaming and table gaming. Our results show evidence that there is no short-term effect of sports betting on the revenues generated from slot gaming and tabling gaming demand, however, our results show some evidence of complementarity on the longer-term between sports betting and other gaming options.
{"title":"Sports betting cannibalization: Evidence from Pennsylvania","authors":"Joseph D. Nedved, Amir B. Ferreira Neto","doi":"10.1016/j.econlet.2024.112031","DOIUrl":"10.1016/j.econlet.2024.112031","url":null,"abstract":"<div><div>The repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018 resulted in the rapid introduction of sports betting into many U.S. markets. This study investigates the introduction of sports betting in Pennsylvania. We explore the staggered implementation of sports betting across casinos in Pennsylvania to analyze the impact of sports betting on slot gaming and table gaming. Our results show evidence that there is no short-term effect of sports betting on the revenues generated from slot gaming and tabling gaming demand, however, our results show some evidence of complementarity on the longer-term between sports betting and other gaming options.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"245 ","pages":"Article 112031"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142661952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.econlet.2024.112034
Danae Arroyos-Calvera , Andrea Isoni , Graham Loomes , Rebecca McDonald
The form of the Allais paradox known as the common ratio effect (CRE) is a violation of deterministic expected utility theory that has been widely replicated with monetary outcomes. Its robustness has stimulated the development of numerous alternative models of risky choice. However, much less is known about the prevalence of the CRE in decisions involving non-monetary outcomes. We conduct a controlled laboratory comparison of the CRE for money versus consumer goods. The CRE is very strong with money, but largely disappears for goods, primarily as a result of differences in risk attitudes between goods and money. We caution against assuming that findings from experiments involving monetary lotteries will reliably generalise to other types of consequences.
{"title":"Does the Allais paradox survive with non-monetary consequences?","authors":"Danae Arroyos-Calvera , Andrea Isoni , Graham Loomes , Rebecca McDonald","doi":"10.1016/j.econlet.2024.112034","DOIUrl":"10.1016/j.econlet.2024.112034","url":null,"abstract":"<div><div>The form of the Allais paradox known as the common ratio effect (CRE) is a violation of deterministic expected utility theory that has been widely replicated with monetary outcomes. Its robustness has stimulated the development of numerous alternative models of risky choice. However, much less is known about the prevalence of the CRE in decisions involving non-monetary outcomes. We conduct a controlled laboratory comparison of the CRE for money versus consumer goods. The CRE is very strong with money, but largely disappears for goods, primarily as a result of differences in risk attitudes between goods and money. We caution against assuming that findings from experiments involving monetary lotteries will reliably generalise to other types of consequences.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 112034"},"PeriodicalIF":2.1,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142578156","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-30DOI: 10.1016/j.econlet.2024.112046
Christina A. Martini , Björn Bos , Moritz A. Drupp , Jasper N. Meya , Martin F. Quaas
This paper investigates the link between dishonesty and the spread of COVID-19 infections. In an online experiment and panel survey, 2,723 Germans completed an incentivized coin-tossing task in March 2020 and reported their infection status in four subsequent survey waves up until December 2021. We find that individuals who are most likely dishonest in the coin-tossing task at the onset of the pandemic, as they report the highest number of winning coin tosses, are more than twice as likely to get a future COVID-19 infection than the sample mean. Respondents who are most likely to have reported dishonestly also engage more in behaviors that increase the risk of becoming infected and of transmitting the infection relative to likely honest respondents. Hence, we postulate that differences in preferences and norm compliance are underlying determinants that affect behavior in the experiment and in the field. We observe a similar relationship at the country level between an incentivized measure of civic honesty and excess deaths due to COVID-19 in 22 OECD countries.
{"title":"Dishonesty is linked with the spread of infectious diseases","authors":"Christina A. Martini , Björn Bos , Moritz A. Drupp , Jasper N. Meya , Martin F. Quaas","doi":"10.1016/j.econlet.2024.112046","DOIUrl":"10.1016/j.econlet.2024.112046","url":null,"abstract":"<div><div>This paper investigates the link between dishonesty and the spread of COVID-19 infections. In an online experiment and panel survey, 2,723 Germans completed an incentivized coin-tossing task in March 2020 and reported their infection status in four subsequent survey waves up until December 2021. We find that individuals who are most likely dishonest in the coin-tossing task at the onset of the pandemic, as they report the highest number of winning coin tosses, are more than twice as likely to get a future COVID-19 infection than the sample mean. Respondents who are most likely to have reported dishonestly also engage more in behaviors that increase the risk of becoming infected and of transmitting the infection relative to likely honest respondents. Hence, we postulate that differences in preferences and norm compliance are underlying determinants that affect behavior in the experiment and in the field. We observe a similar relationship at the country level between an incentivized measure of civic honesty and excess deaths due to COVID-19 in 22 OECD countries.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"245 ","pages":"Article 112046"},"PeriodicalIF":2.1,"publicationDate":"2024-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142702789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-28DOI: 10.1016/j.econlet.2024.112041
Ximeng Fang , Puja Singhal
Energy efficiency improvements can play an important role in reducing emissions from residential buildings, yet consumer decisions involving energy costs can be subject to bounded rationality due to, e.g., inattention and myopia. We present evidence that long-term, high-stakes decisions in the housing market are influenced by short-term contextual factors. Using data on housing transactions through a large online platform in Germany, we document that houses purchased following unusually cold weather tend to be more energy efficient, while the reverse is not true for unusually warm weather. This asymmetry suggests that the effect of temperature fluctuations on energy efficiency demand may be driven by salience of heating costs.
{"title":"Weather to pay attention to energy efficiency on the housing market","authors":"Ximeng Fang , Puja Singhal","doi":"10.1016/j.econlet.2024.112041","DOIUrl":"10.1016/j.econlet.2024.112041","url":null,"abstract":"<div><div>Energy efficiency improvements can play an important role in reducing emissions from residential buildings, yet consumer decisions involving energy costs can be subject to bounded rationality due to, e.g., inattention and myopia. We present evidence that long-term, high-stakes decisions in the housing market are influenced by short-term contextual factors. Using data on housing transactions through a large online platform in Germany, we document that houses purchased following unusually cold weather tend to be more energy efficient, while the reverse is not true for unusually warm weather. This asymmetry suggests that the effect of temperature fluctuations on energy efficiency demand may be driven by salience of heating costs.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"245 ","pages":"Article 112041"},"PeriodicalIF":2.1,"publicationDate":"2024-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142592802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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