Eduardo M. Azevedo, David M. Pennock, Bo Waggoner, E. Weyl
Standard auction formats feature either an upper bound on the equilibrium price that descends over time (as in the Dutch auction) or a lower bound on the equilibrium price that ascends over time (as in the English auction). We show that in some settings with costly information acquisition, auctions featuring both (viz., a narrowing channel of prices) outperform the standard formats. This Channel auction preserves some of benefits of both the English (truthful revelation) and Dutch (security for necessary information acquisition) auctions. Natural applications include housing, online auction sites like eBay, recording transactions on blockchains, and spectrum rights. This paper was accepted by Joshua Gans, business strategy.
{"title":"Channel Auctions","authors":"Eduardo M. Azevedo, David M. Pennock, Bo Waggoner, E. Weyl","doi":"10.2139/ssrn.3241744","DOIUrl":"https://doi.org/10.2139/ssrn.3241744","url":null,"abstract":"Standard auction formats feature either an upper bound on the equilibrium price that descends over time (as in the Dutch auction) or a lower bound on the equilibrium price that ascends over time (as in the English auction). We show that in some settings with costly information acquisition, auctions featuring both (viz., a narrowing channel of prices) outperform the standard formats. This Channel auction preserves some of benefits of both the English (truthful revelation) and Dutch (security for necessary information acquisition) auctions. Natural applications include housing, online auction sites like eBay, recording transactions on blockchains, and spectrum rights. This paper was accepted by Joshua Gans, business strategy.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125515594","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 recent times the growing sense of environment protection has witnessed radical changes in industrial sector and real estate is no different. With passing time we have witnessed the growth of the concept of green buildings not only around the world but also in Indian real estate industry.
In this work, the author will be indulging into the parley about the sudden outbursts of the concept of green building in India, what they are and the present legislative regime with scope of changes and improvements in the legal infrastructure for development in future. The importance of the concept of green buildings, its global and domestic (Indian) standing, and especially the need for the shift from traditional buildings to these sustainable forms of buildings will be brought into light.
This work will be divided in three major sections, the first one will be talking about the concept of Green Buildings and why there is now a need to replace traditional buildings with these green buildings, succeeded by the parley discussing this concept in the business of Real Estate in Indian Market, this section will cover in brief the history of the concept of green building, its need, the current market situation and governments approach to promote it. This will be succeeded by a brief discussion of the lacunae in these attempts to promote this concept and will finally end with author’s opinion and suggestion over the subject.
{"title":"Reinforcing the Concept of Green Buildings in Indian Real Estate Industry","authors":"D. Roy","doi":"10.2139/ssrn.3483329","DOIUrl":"https://doi.org/10.2139/ssrn.3483329","url":null,"abstract":"In recent times the growing sense of environment protection has witnessed radical changes in industrial sector and real estate is no different. With passing time we have witnessed the growth of the concept of green buildings not only around the world but also in Indian real estate industry.<br> <br>In this work, the author will be indulging into the parley about the sudden outbursts of the concept of green building in India, what they are and the present legislative regime with scope of changes and improvements in the legal infrastructure for development in future. The importance of the concept of green buildings, its global and domestic (Indian) standing, and especially the need for the shift from traditional buildings to these sustainable forms of buildings will be brought into light.<br> <br>This work will be divided in three major sections, the first one will be talking about the concept of Green Buildings and why there is now a need to replace traditional buildings with these green buildings, succeeded by the parley discussing this concept in the business of Real Estate in Indian Market, this section will cover in brief the history of the concept of green building, its need, the current market situation and governments approach to promote it. This will be succeeded by a brief discussion of the lacunae in these attempts to promote this concept and will finally end with author’s opinion and suggestion over the subject.<br>","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126570247","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}
We study a large-scale French reform that provided generous downside insurance for unemployed individuals starting a business. We study whether this reform affects the composition of people who are drawn into entrepreneurship. New firms started in response to the reform are, on average, smaller, but have similar growth expectations and education levels compared to start-ups before the reform. They are also as likely to survive or to hire. In aggregate, the effect of the reform on employment is largely offset by large crowd-out effects. However, because new firms are more productive, the reform has the impact of raising aggregate productivity. These results suggest that the dispersion of entrepreneurial abilities is small in the data, so that the facilitation of entry leads to sizable Schumpeterian dynamics at the firm-level.
{"title":"Can Unemployment Insurance Spur Entrepreneurial Activity? Evidence from France","authors":"J. Hombert, A. Schoar, D. Sraer, D. Thesmar","doi":"10.2139/ssrn.2329357","DOIUrl":"https://doi.org/10.2139/ssrn.2329357","url":null,"abstract":"We study a large-scale French reform that provided generous downside insurance for unemployed individuals starting a business. We study whether this reform affects the composition of people who are drawn into entrepreneurship. New firms started in response to the reform are, on average, smaller, but have similar growth expectations and education levels compared to start-ups before the reform. They are also as likely to survive or to hire. In aggregate, the effect of the reform on employment is largely offset by large crowd-out effects. However, because new firms are more productive, the reform has the impact of raising aggregate productivity. These results suggest that the dispersion of entrepreneurial abilities is small in the data, so that the facilitation of entry leads to sizable Schumpeterian dynamics at the firm-level.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127242910","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}
Nominal stock prices are arbitrary. Therefore, when evaluating how a piece of news should affect the price of a stock, rational investors should think in percentage rather than dollar terms. However, dollar price changes are ubiquitously reported and discussed. This may both cause and reflect a tendency of investors to think about the impact of news in dollar terms, leading to more extreme return responses to news for lower-priced stocks. We find a number of results consistent with such non-proportional thinking. First, lower-priced stocks have higher total volatility, idiosyncratic volatility, and market betas, after controlling flexibly for size. To identify a causal effect of price, we show that volatility increases sharply following pre-announced stock splits and drops following reverse stock splits. The returns of lower-priced stocks also respond more strongly to firm-specific news events, all else equal. The economic magnitudes are large: a doubling in a stock's nominal price is associated with a 20-30% decline in its volatility, beta, and return response to firm-specific news. These patterns are not exclusive to small, illiquid stocks; they hold even among the largest stocks. Non-proportional thinking can explain a variety of asset pricing anomalies such as long-run and short-run reversals, as well as the negative relation between past returns and volatility (i.e., the leverage effect). Our analysis also shows that the well-documented negative relation between risk (volatility or beta) and size is actually driven by nominal prices rather than fundamentals.
{"title":"Can the Market Multiply and Divide? Non-Proportional Thinking in Financial Markets","authors":"K. Shue, Richard Townsend","doi":"10.2139/ssrn.3148311","DOIUrl":"https://doi.org/10.2139/ssrn.3148311","url":null,"abstract":"Nominal stock prices are arbitrary. Therefore, when evaluating how a piece of news should affect the price of a stock, rational investors should think in percentage rather than dollar terms. However, dollar price changes are ubiquitously reported and discussed. This may both cause and reflect a tendency of investors to think about the impact of news in dollar terms, leading to more extreme return responses to news for lower-priced stocks. We find a number of results consistent with such non-proportional thinking. First, lower-priced stocks have higher total volatility, idiosyncratic volatility, and market betas, after controlling flexibly for size. To identify a causal effect of price, we show that volatility increases sharply following pre-announced stock splits and drops following reverse stock splits. The returns of lower-priced stocks also respond more strongly to firm-specific news events, all else equal. The economic magnitudes are large: a doubling in a stock's nominal price is associated with a 20-30% decline in its volatility, beta, and return response to firm-specific news. These patterns are not exclusive to small, illiquid stocks; they hold even among the largest stocks. Non-proportional thinking can explain a variety of asset pricing anomalies such as long-run and short-run reversals, as well as the negative relation between past returns and volatility (i.e., the leverage effect). Our analysis also shows that the well-documented negative relation between risk (volatility or beta) and size is actually driven by nominal prices rather than fundamentals.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"2011 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129024383","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}
Encouraging innovation is an important part of environmental policy. A large literature in environmental economics examines the links between environmental policy and innovation. This paper reviews recent literature on green innovation. I highlight major trends in the literature, including an increased number of cross-country studies and a focus on the effect of different policy instruments on innovation. I include a discussion of the justifications and evidence for technology-specific policy incentives and present evidence on the effectiveness of government R&D spending. My review concludes with a discussion of three promising areas for new research on environmental innovation.
{"title":"Environmental Policy and Innovation: A Decade of Research","authors":"D. Popp","doi":"10.3386/W25631","DOIUrl":"https://doi.org/10.3386/W25631","url":null,"abstract":"Encouraging innovation is an important part of environmental policy. A large literature in environmental economics examines the links between environmental policy and innovation. This paper reviews recent literature on green innovation. I highlight major trends in the literature, including an increased number of cross-country studies and a focus on the effect of different policy instruments on innovation. I include a discussion of the justifications and evidence for technology-specific policy incentives and present evidence on the effectiveness of government R&D spending. My review concludes with a discussion of three promising areas for new research on environmental innovation.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131285578","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}
We study when and why firms exercise real options. Using detailed project-level investment data, we find that the likelihood that a firm exercises a real option is strongly related to peer exercise behavior. Peer exercise decisions are as important in explaining exercise behavior as variables commonly associated with standard real option theories, such as volatility. We identify peer effects using localized exogenous variation in peer project exercise decisions and find evidence consistent with information externalities being important for exercise behavior. (JEL G30, G31, G32)
{"title":"Real Option Exercise: Empirical Evidence","authors":"Paul H. Décaire, E. Gilje, Jérôme P. Taillard","doi":"10.2139/ssrn.3342565","DOIUrl":"https://doi.org/10.2139/ssrn.3342565","url":null,"abstract":"\u0000 We study when and why firms exercise real options. Using detailed project-level investment data, we find that the likelihood that a firm exercises a real option is strongly related to peer exercise behavior. Peer exercise decisions are as important in explaining exercise behavior as variables commonly associated with standard real option theories, such as volatility. We identify peer effects using localized exogenous variation in peer project exercise decisions and find evidence consistent with information externalities being important for exercise behavior. (JEL G30, G31, G32)","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130494599","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}
When are scientific advances translated into commercial products via startup formation? Although prior literature has offered several categories of answers, the commercial potential of a scientific advance is generally unobserved and potentially confounding. We assemble a sample of over 20,000 “twin” scientific discoveries in order to hold constant differences in the nature of the scientific advance, thereby allowing us to more precisely examine characteristics that predict startup commercialization. We find that teams of academic scientists whose former collaborators include “star” serial entrepreneurs are much more likely to commercialize their own discoveries via startups, as are more interdisciplinary teams of scientists.
{"title":"The Entrepreneurial Commercialization of Science: Evidence From 'Twin' Discoveries","authors":"M. Marx, David H. Hsu","doi":"10.2139/ssrn.3312499","DOIUrl":"https://doi.org/10.2139/ssrn.3312499","url":null,"abstract":"When are scientific advances translated into commercial products via startup formation? Although prior literature has offered several categories of answers, the commercial potential of a scientific advance is generally unobserved and potentially confounding. We assemble a sample of over 20,000 “twin” scientific discoveries in order to hold constant differences in the nature of the scientific advance, thereby allowing us to more precisely examine characteristics that predict startup commercialization. We find that teams of academic scientists whose former collaborators include “star” serial entrepreneurs are much more likely to commercialize their own discoveries via startups, as are more interdisciplinary teams of scientists.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"89 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123220820","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}
Recent studies document a decline in the share of labour and a simultaneous increase in the share of residual (‘factorless’) income in national GDP. We argue the need for study of factor incomes in cross-border production to complement country studies. We define a GVC production function that tracks the value added in each stage of production in any country-industry. We define a new residual as the difference between the value of the final good and the payments to all tangibles (capital and labour) in any stage. We focus on GVCs of manufactured goods and find the residual to be large. We interpret it as income for intangibles that are (mostly) not covered in current national accounts statistics. We document decreasing labour and increasing capital income shares over the period 2000-14. This is mainly due to increasing income for intangible assets, in particular in GVCs of durable goods. We provide evidence that suggests that the 2000s should be seen as an exceptional period in the global economy during which multinational firms benefitted from reduced labour costs through offshoring, while capitalising on existing firm-specific intangibles, such as brand names, at little marginal cost.
{"title":"Factor Incomes in Global Value Chains: The Role of Intangibles","authors":"W. Chen, B. Los, M. Timmer","doi":"10.3386/W25242","DOIUrl":"https://doi.org/10.3386/W25242","url":null,"abstract":"Recent studies document a decline in the share of labour and a simultaneous increase in the share of residual (‘factorless’) income in national GDP. We argue the need for study of factor incomes in cross-border production to complement country studies. We define a GVC production function that tracks the value added in each stage of production in any country-industry. We define a new residual as the difference between the value of the final good and the payments to all tangibles (capital and labour) in any stage. We focus on GVCs of manufactured goods and find the residual to be large. We interpret it as income for intangibles that are (mostly) not covered in current national accounts statistics. We document decreasing labour and increasing capital income shares over the period 2000-14. This is mainly due to increasing income for intangible assets, in particular in GVCs of durable goods. We provide evidence that suggests that the 2000s should be seen as an exceptional period in the global economy during which multinational firms benefitted from reduced labour costs through offshoring, while capitalising on existing firm-specific intangibles, such as brand names, at little marginal cost.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"201 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123033207","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}
Abstract In the absence of market imperfections, the mutuality principle leads to efficient risk sharing and the Pareto optimal asset allocations. With market imperfections such as transaction costs and information asymmetry, risk-sharing becomes costly, and it can even lead to financial crises. We emphasize the impact of risk-sharing on the real economy, especially the incentives for the insured party to take on excessive risks because the downsides are borne by the insurer or the ultimate risk taker. We review selective literature and summarize papers included in this issue, grouping them into three broad categories: risk identification, risk measurement, and risk management techniques. We conclude by outlining several streams of future research, including mechanisms to monitor excessive risk-taking, how to mitigate risk interconnectedness, and the potential applications of Fintech in risk sharing.
{"title":"Information, Incentives, and Effects of Risk-Sharing on the Real Economy","authors":"Mark H. Liu, Wenfeng Wu, Tong Yu","doi":"10.2139/ssrn.3358153","DOIUrl":"https://doi.org/10.2139/ssrn.3358153","url":null,"abstract":"Abstract In the absence of market imperfections, the mutuality principle leads to efficient risk sharing and the Pareto optimal asset allocations. With market imperfections such as transaction costs and information asymmetry, risk-sharing becomes costly, and it can even lead to financial crises. We emphasize the impact of risk-sharing on the real economy, especially the incentives for the insured party to take on excessive risks because the downsides are borne by the insurer or the ultimate risk taker. We review selective literature and summarize papers included in this issue, grouping them into three broad categories: risk identification, risk measurement, and risk management techniques. We conclude by outlining several streams of future research, including mechanisms to monitor excessive risk-taking, how to mitigate risk interconnectedness, and the potential applications of Fintech in risk sharing.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131963500","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 article we study differences in the returns to R&D investment between firms that sell in international markets and firms that only sell in the domestic market. We use German firm-level data from the high-tech manufacturing sector to estimate a dynamic structural model of a firm's decision to invest in R&D and use it to measure the difference in expected long-run benefit from R&D investment for exporting and domestic firms. The results show that R&D investment leads to a higher rate of product and process innovation among exporting firms and these innovations have a larger impact on productivity improvement in export market sales. As a result, exporting firms have a higher payoff from R&D investment, invest in R&D more frequently than firms that only sell in the domestic market, and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance of firms that differ in their export market exposure. Simulating the introduction of trade tariffs we find a substantial reduction in firms' productivity growth and incentive to invest in R&D.
{"title":"Firm R&D Investment and Export Market Exposure","authors":"Bettina Peters, Mark J. Roberts, Van Anh Vuong","doi":"10.2139/ssrn.3289091","DOIUrl":"https://doi.org/10.2139/ssrn.3289091","url":null,"abstract":"In this article we study differences in the returns to R&D investment between firms that sell in international markets and firms that only sell in the domestic market. We use German firm-level data from the high-tech manufacturing sector to estimate a dynamic structural model of a firm's decision to invest in R&D and use it to measure the difference in expected long-run benefit from R&D investment for exporting and domestic firms. The results show that R&D investment leads to a higher rate of product and process innovation among exporting firms and these innovations have a larger impact on productivity improvement in export market sales. As a result, exporting firms have a higher payoff from R&D investment, invest in R&D more frequently than firms that only sell in the domestic market, and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance of firms that differ in their export market exposure. Simulating the introduction of trade tariffs we find a substantial reduction in firms' productivity growth and incentive to invest in R&D.","PeriodicalId":325993,"journal":{"name":"Ewing Marion Kauffman Foundation Research Paper Series","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132651395","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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