This paper investigates the role of persuasion mechanisms in collective decision-making. A biased sender adopts a Bayesian persuasion mechanism to provide a committee of uninformed receivers with signals about the unknown state of the world. We compare public persuasion with private persuasion. We find that the sender can always reach the concave closure of the set of possible expected payoffs under public persuasion, regardless of the number of generated signals. The sender is weakly worse off under private persuasion. We also provide conditions under which the receivers' welfare from private persuasion dominates that from public persuasion. Moreover, voting fully aggregates receivers' private information in the state where the sender and receivers' preferences are perfectly aligned, while full information aggregation may fail in other states.
{"title":"Bayesian Persuasion with Multiple Receivers","authors":"Yun Wang","doi":"10.2139/ssrn.2625399","DOIUrl":"https://doi.org/10.2139/ssrn.2625399","url":null,"abstract":"This paper investigates the role of persuasion mechanisms in collective decision-making. A biased sender adopts a Bayesian persuasion mechanism to provide a committee of uninformed receivers with signals about the unknown state of the world. We compare public persuasion with private persuasion. We find that the sender can always reach the concave closure of the set of possible expected payoffs under public persuasion, regardless of the number of generated signals. The sender is weakly worse off under private persuasion. We also provide conditions under which the receivers' welfare from private persuasion dominates that from public persuasion. Moreover, voting fully aggregates receivers' private information in the state where the sender and receivers' preferences are perfectly aligned, while full information aggregation may fail in other states.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114392382","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we extend the tests of the monotonicity and concavity of a non-spatial translog production function to the case where there is spatial autoregressive dependence. The tests are then applied using data for 40 European countries over the period 1995-2008.
{"title":"Testing the Monotonicity and Curvature of a Translog Production Function with Spatial Autoregressive Dependence","authors":"Anthony Glass, Karligash Glass","doi":"10.2139/ssrn.2227731","DOIUrl":"https://doi.org/10.2139/ssrn.2227731","url":null,"abstract":"In this paper we extend the tests of the monotonicity and concavity of a non-spatial translog production function to the case where there is spatial autoregressive dependence. The tests are then applied using data for 40 European countries over the period 1995-2008.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"26 7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114463805","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Stanislav Anatolyev, R. Khabibullin, Artem Prokhorov
We propose a new sequential procedure for estimating a dynamic joint distribution of a group of assets. The procedure is motivated by the theory of composite likelihood and by the theory of copula functions. It recovers m-variate distributions by coupling univariate distributions with distributions of dimension m - 1. This copula-based method produces pseudo-maximum-likelihood type estimators of the distribution of all pairs, triplets, quadruples, etc, of assets in the group. Eventually the joint distribution of unrestricted dimension can be recovered. We show that the resulting density can be viewed as a exible factorization of the underlying true distribution, subject to an approximation error. Therefore, it inherits the well known asymptotic properties of the conventional copula-based pseudo-MLE but offers important advantages. Specifically, the proposed procedure trades the dimensionality of the parameter space for numerous simpler estimations, making it feasible when conventional methods fail in finite samples. Even though there are more optimization problems to solve, each is of a much lower dimension. In addition, the parameterization tends to be much more exible. Using a GARCH-type application from stock returns, we demonstrate how the new procedure provides excellent fit when the dimension is moderate and how it remains operational when the conventional method fails due to high dimensionality.
{"title":"Reconstructing High Dimensional Dynamic Distributions from Distributions of Lower Dimension","authors":"Stanislav Anatolyev, R. Khabibullin, Artem Prokhorov","doi":"10.2139/ssrn.2025779","DOIUrl":"https://doi.org/10.2139/ssrn.2025779","url":null,"abstract":"We propose a new sequential procedure for estimating a dynamic joint distribution of a group of assets. The procedure is motivated by the theory of composite likelihood and by the theory of copula functions. It recovers m-variate distributions by coupling univariate distributions with distributions of dimension m - 1. This copula-based method produces pseudo-maximum-likelihood type estimators of the distribution of all pairs, triplets, quadruples, etc, of assets in the group. Eventually the joint distribution of unrestricted dimension can be recovered. We show that the resulting density can be viewed as a exible factorization of the underlying true distribution, subject to an approximation error. Therefore, it inherits the well known asymptotic properties of the conventional copula-based pseudo-MLE but offers important advantages. Specifically, the proposed procedure trades the dimensionality of the parameter space for numerous simpler estimations, making it feasible when conventional methods fail in finite samples. Even though there are more optimization problems to solve, each is of a much lower dimension. In addition, the parameterization tends to be much more exible. Using a GARCH-type application from stock returns, we demonstrate how the new procedure provides excellent fit when the dimension is moderate and how it remains operational when the conventional method fails due to high dimensionality.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"1 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128841997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper investigates the survival of newly created small and medium enterprises in Brazilian manufacturing taking as reference the 1996-2005 period. The econometric analysis relies on time-varying version of the proportional hazard rate model that controls for unobserved heterogeneity. The evidence mostly corroborates previous findings for developed countries. Salient results include the positive role played by firm size, industry size and industry growth on survival and yet the negative influence exerted by industrial concentration and entry rate.
{"title":"Determinants of Survival of Newly Created SMEs in the Brazilian Manufacturing: An Econometric Study","authors":"Luís Otávio Façanha, Marcelo Resende, V. Cardoso","doi":"10.2139/ssrn.2008608","DOIUrl":"https://doi.org/10.2139/ssrn.2008608","url":null,"abstract":"The paper investigates the survival of newly created small and medium enterprises in Brazilian manufacturing taking as reference the 1996-2005 period. The econometric analysis relies on time-varying version of the proportional hazard rate model that controls for unobserved heterogeneity. The evidence mostly corroborates previous findings for developed countries. Salient results include the positive role played by firm size, industry size and industry growth on survival and yet the negative influence exerted by industrial concentration and entry rate.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-02-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122975033","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper discusses the economic problem and the institutional features underlying the Nimby syndrome, and illustrates preliminary empirical evidence for Italy. It argues that siting procedures taking local preferences into account should be preferred when the heterogeneity in preferences across communities is greater than the heterogeneity in constructing and operating costs across sites. The elicitation of preferences is better pursued through auction-like mechanisms rather than multilateral negotiations if: the characteristics of the facility and the institutional context are such that credible information about the risks associated with the facility are available; conflicting preferences at the local level can be preliminarily aggregated; and compensations are mainly monetary. Empirical results suggest that the intensity of local opposition is greater when the perceived risk associated with the facility is higher and more concentrated, and the communication between different levels of government poor. The conflict between highly centralized siting procedures and highly decentralized administrative institutions, the difficulty of providing credible information about the risks associated with the facility, and low political commitment are identified as the critical points.
{"title":"Siting Public Facilities: A Theoretical and Empirical Analysis of the Nimby Syndrome in Italy","authors":"Roberta Occhilupo, Giuliana Palumbo, P. Sestito","doi":"10.2139/SSRN.1968841","DOIUrl":"https://doi.org/10.2139/SSRN.1968841","url":null,"abstract":"The paper discusses the economic problem and the institutional features underlying the Nimby syndrome, and illustrates preliminary empirical evidence for Italy. It argues that siting procedures taking local preferences into account should be preferred when the heterogeneity in preferences across communities is greater than the heterogeneity in constructing and operating costs across sites. The elicitation of preferences is better pursued through auction-like mechanisms rather than multilateral negotiations if: the characteristics of the facility and the institutional context are such that credible information about the risks associated with the facility are available; conflicting preferences at the local level can be preliminarily aggregated; and compensations are mainly monetary. Empirical results suggest that the intensity of local opposition is greater when the perceived risk associated with the facility is higher and more concentrated, and the communication between different levels of government poor. The conflict between highly centralized siting procedures and highly decentralized administrative institutions, the difficulty of providing credible information about the risks associated with the facility, and low political commitment are identified as the critical points.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"224 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124444831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Andrea Carriero, Todd E. Clark, Massimiliano Marcellino
In this paper we examine how the forecasting performance of Bayesian VARs is affected by a number of specification choices. In the baseline case, we use a Normal-Inverted Wishart prior that, when combined with a (pseudo-) iterated approach, makes the analytical computation of multi-step forecasts feasible and simple, in particular when using standard and fixed values for the tightness and the lag length. We then assess the role of the optimal choice of the tightness, of the lag length and of both; compare alternative approaches to multi-step forecasting (direct, iterated, and pseudo-iterated); discuss the treatment of the error variance and of cross-variable shrinkage; and address a set of additional issues, including the size of the VAR, modeling in levels or growth rates, and the extent of forecast bias induced by shrinkage. We obtain a large set of empirical results, but we can summarize them by saying that we find very small losses (and sometimes even gains) from the adoption of specification choices that make BVAR modeling quick and easy. This finding could therefore further enhance the diffusion of the BVAR as an econometric tool for a vast range of applications.
{"title":"Bayesian VARs: Specification Choices and Forecast Accuracy","authors":"Andrea Carriero, Todd E. Clark, Massimiliano Marcellino","doi":"10.2139/ssrn.1830163","DOIUrl":"https://doi.org/10.2139/ssrn.1830163","url":null,"abstract":"In this paper we examine how the forecasting performance of Bayesian VARs is affected by a number of specification choices. In the baseline case, we use a Normal-Inverted Wishart prior that, when combined with a (pseudo-) iterated approach, makes the analytical computation of multi-step forecasts feasible and simple, in particular when using standard and fixed values for the tightness and the lag length. We then assess the role of the optimal choice of the tightness, of the lag length and of both; compare alternative approaches to multi-step forecasting (direct, iterated, and pseudo-iterated); discuss the treatment of the error variance and of cross-variable shrinkage; and address a set of additional issues, including the size of the VAR, modeling in levels or growth rates, and the extent of forecast bias induced by shrinkage. We obtain a large set of empirical results, but we can summarize them by saying that we find very small losses (and sometimes even gains) from the adoption of specification choices that make BVAR modeling quick and easy. This finding could therefore further enhance the diffusion of the BVAR as an econometric tool for a vast range of applications.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115785140","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents the functional relationship between two areas of interest in contemporary behavioral economics: one concerning choices under conditions of risk, the other concerning choices in time. The paper first presents the general formula of the relationship between decision utility, the survival function, and the discounting function, where decision utility is an alternative to Cumulative Prospect Theory in describing choices under risk (Kontek, 2010). The stretched exponential function appears to be a simple functional form of the resulting discounting function. Solutions obtained using more complex forms of decision utility and survival functions are also considered. These likewise lead to the stretched exponential discounting function. The paper shows that the relationship may also have other forms, including the hyperbolic functions typically used to describe the intertemporal experimental results. This solution has however several descriptive disadvantages, which restricts its common use in the description of lottery and intertemporal choices, and in financial asset valuations.
{"title":"Linking Decision and Time Utilities","authors":"K. Kontek","doi":"10.2139/ssrn.1727985","DOIUrl":"https://doi.org/10.2139/ssrn.1727985","url":null,"abstract":"This paper presents the functional relationship between two areas of interest in contemporary behavioral economics: one concerning choices under conditions of risk, the other concerning choices in time. The paper first presents the general formula of the relationship between decision utility, the survival function, and the discounting function, where decision utility is an alternative to Cumulative Prospect Theory in describing choices under risk (Kontek, 2010). The stretched exponential function appears to be a simple functional form of the resulting discounting function. Solutions obtained using more complex forms of decision utility and survival functions are also considered. These likewise lead to the stretched exponential discounting function. The paper shows that the relationship may also have other forms, including the hyperbolic functions typically used to describe the intertemporal experimental results. This solution has however several descriptive disadvantages, which restricts its common use in the description of lottery and intertemporal choices, and in financial asset valuations.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"116 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127991316","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we estimate the impact of local authority infrastructure spending in New Zealand using spatial econometric modelling, with the infrastructure spending itself endogenously determined. Utilizing data from the New Zealand Census and Local Authorities Finance data (1991-2008), aggregated to functional labour market areas, we formulate a simultaneous equations growth model of real income, population, land rent and public infrastructure investment. Estimation is conducted using a spatial 3SLS procedure. We find that an increase in local infrastructure spending increases population growth, real income and land values, but is itself endogenous and spatially correlated.
{"title":"The Spatial Impact of Local Infrastructural Investment in New Zealand","authors":"William Cochrane, A. Grimes, P. McCann, J. Poot","doi":"10.2139/ssrn.1689207","DOIUrl":"https://doi.org/10.2139/ssrn.1689207","url":null,"abstract":"In this paper we estimate the impact of local authority infrastructure spending in New Zealand using spatial econometric modelling, with the infrastructure spending itself endogenously determined. Utilizing data from the New Zealand Census and Local Authorities Finance data (1991-2008), aggregated to functional labour market areas, we formulate a simultaneous equations growth model of real income, population, land rent and public infrastructure investment. Estimation is conducted using a spatial 3SLS procedure. We find that an increase in local infrastructure spending increases population growth, real income and land values, but is itself endogenous and spatially correlated.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124382307","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper proposes a new pre-test estimator of panel data models including time invariant variables based upon the Mundlak-Krishnakumar estimator and an "unrestricted” Hausman-Taylor estimator. The paper evaluates the biases of currently used restricted estimators, omitting the average-over-time of at least one endogenous time-varying explanatory variable. Repeated Between, Ordinary Least Squares, Two stage restricted Between and Oaxaca-Geisler estimator, Fixed Effect Vector Decomposition, Generalized least squares may lead to wrong conclusions regarding the statistical significance of the estimated parameter values of time-invariant variables.
{"title":"Inference on Time-Invariant Variables Using Panel Data: A Pretest Estimator","authors":"Jean-Bernard Chatelain, K. Ralf","doi":"10.2139/ssrn.3165633","DOIUrl":"https://doi.org/10.2139/ssrn.3165633","url":null,"abstract":"This paper proposes a new pre-test estimator of panel data models including time invariant variables based upon the Mundlak-Krishnakumar estimator and an \"unrestricted” Hausman-Taylor estimator. The paper evaluates the biases of currently used restricted estimators, omitting the average-over-time of at least one endogenous time-varying explanatory variable. Repeated Between, Ordinary Least Squares, Two stage restricted Between and Oaxaca-Geisler estimator, Fixed Effect Vector Decomposition, Generalized least squares may lead to wrong conclusions regarding the statistical significance of the estimated parameter values of time-invariant variables.","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-01-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131709902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this report, we examine whether the proportion of workers who receive training (and whether the training duration) varies with age in Quebec and Ontario using data from the Workplace and Employee Survey from 1999-2004. In general, we find that the probability that a worker receives training begins to fall significantly at the age 55 and this for both classroom and on-the-job training. For example, for both types of training, the probability that a worker between the ages of 55 and 59 receives training is 9 percentage points lower than that of a worker between the ages of 35 and 44. For a worker aged between 60 and 64, the differential is 19.6 percentage points. We obtain similar results when studying the duration of training. At the provincial level, we find that the incidence of classroom training decreases faster with age in Quebec than in Ontario
{"title":"The Determinants of Training by Age in Quebec and Ontario: An Analysis of the Intensive and Extensive Margins","authors":"B. Dostie, P. Léger","doi":"10.2139/SSRN.1319743","DOIUrl":"https://doi.org/10.2139/SSRN.1319743","url":null,"abstract":"In this report, we examine whether the proportion of workers who receive training (and whether the training duration) varies with age in Quebec and Ontario using data from the Workplace and Employee Survey from 1999-2004. In general, we find that the probability that a worker receives training begins to fall significantly at the age 55 and this for both classroom and on-the-job training. For example, for both types of training, the probability that a worker between the ages of 55 and 59 receives training is 9 percentage points lower than that of a worker between the ages of 35 and 44. For a worker aged between 60 and 64, the differential is 19.6 percentage points. We obtain similar results when studying the duration of training. At the provincial level, we find that the incidence of classroom training decreases faster with age in Quebec than in Ontario","PeriodicalId":320844,"journal":{"name":"PSN: Econometrics","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114588395","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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