Thorsten Hens, An extension of Mantel (1976) to incomplete markets, Journal of Mathematical Economics, Vol. 36 (2), 2001. (Journal Article)
In the incomplete markets model with numeraire asset and a single consumption good we show that even with homothetic preferences, on compact sets of prices continuity, Walras’ identity and homogeneity characterize the properties of market excess demand. This result is proved by an extension of [J. Econ. Theory 12 (1976) 197] to the case of incomplete markets. |
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Kjell G. Nyborg, Ilya A Strebulaev, Collateral and short squeezing of liquidity in fixed rate tenders, Journal of International Money and Finance, Vol. 20 (6), 2001. (Journal Article)
The paper models fixed rate tenders, where a central bank offers to lend central bank funds to financial institutions. Bidders are constrained by the amount of collateral they have. We focus on the strategic interaction between bidding in the tender and trading in the interbank market after the tender, where short squeezes could occur. We examine how the design of the tender affects equilibrium bidding behavior and the incidence of short squeezes. Important elements in the analysis include the type of policy implemented by the central bank as well as bidders' initial endowments of liquidity and collateral. Three instruments for softening short squeezes are identified: the tender rate, the tender sizes, and admissible collateral. Increasing the tender rate or size tends to decrease the probability and severity of a short squeeze. The possibility of a short squeeze may induce bidders to oversubscribe even if the tender rate is higher than the competitive rate. |
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Friedrich Schneider, Alexander Wagner, Institutions of conflict management and economic growth in the European Union, Kyklos, Vol. 54 (4), 2001. (Journal Article)
High-quality institutions of conflict management can serve to mitigate the negative effects of adverse external shocks and social conflict on long-run economic growth. But in addition to the benefits (production-enhancing cooperation), there are also costs (taxes and rent-seeking) of conflict-management institutions like corporatism and trust. We examine both positive and negative influences in the context of a simple growth model. Contrary to previous research, we predict a non-linear relationship between institutions and growth. The empirical evidence from a panel for the years 1961-1995 shows that neo-corporatism and trust have each had independent positive effects on long-run growth in the EU, suggesting that the diminishing product range of institutions has not yet been reached. Under an increasing size of government, however, both institutions lead to a dominating negative rent-seeking effect. |
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Helmut Max Dietl, Nur Zuschauer von auswärts bringen mehr Einnahmen - Ökonomie-Professor Helmut Dietl über die wirtschaftlichen Auswirkungen eines neuen Stadions für die Stadt, In: Süddeutsche Zeitung, p. 49, 17 October 2001. (Newspaper Article)
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Andrea Schenker-Wicki, II. Hochschulmanagement in der Schweiz, In: Symposium zur ökonomischen Analyse der Unternehmung. 2001. (Conference Presentation)
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Steven Ongena, David C Smith, The duration of bank relationships, Journal of Financial Economics, Vol. 61 (3), 2001. (Journal Article)
We analyze the duration of bank relationships using a unique panel data set of listed firms and their banks from the bank-dominated Norwegian market. We find that firms are more likely to leave a bank as the relationship matures. Small, profitable, and highly leveraged firms maintain shorter bank relationships, as do firms with multiple bank relationships. These findings are robust to censoring, alternate specifications for the distribution of relationship duration, and other control variables relevant to the Norwegian market. Overall, our results cast doubt on theories suggesting that firms become locked into bank relationships. |
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John Hancock, Paul Huber, Pablo Koch Medina, Value creation in the insurance industry, Risk management and insurance review, Vol. 4 (2), 2001. (Journal Article)
Using the insights of current research in corporate finance and financial institutions, the authors briefly present a consistent economic framework for looking at insurance. Shareholders of insurance companies provide risk capital that is invested in financial assets and therefore earns the market return of the assets it is invested in. However, due to the legal and fiscal environment insurance companies are in, they have a competitive disadvantage at investing, and this gives rise to frictional capital costs. The core competence of insurers is in managing the size of these frictional capital costs. Insurers must ensure that they can sell insurance for a price in excess of what they need to produce the cover they sell and compensate the incurred frictional costs on risk capital. It is through the ability to do so that insurers create shareholder value. |
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Elia Yuste, Francine Braun-Chen, Comparative Evaluation of the Linguistic Output of MT Systems for Translation and Information Purposes, In: Proceedings of the Machine Translation Summit VII, MT Evaluation Workshop, Santiago de Compostela, Spain, September 2001. (Conference or Workshop Paper)
This paper describes a Machine Translation (MT) evaluation experiment where emphasis is placed on the quality of output and the
extent to which it is geared to different users' needs. Adopting a very specific scenario, that of a multilingual international organisation, a clear distinction is made between two user classes: translators and administrators. Whereas the first group requires MT output to be accurate and of good post-editable quality in order to produce a polished translation, the second group primarily needs informative data for carrying out other, non-linguistic tasks, and therefore uses MT more as an information-gathering and gisting tool.
During the experiment, MT output of three different systems is compared in order to establish which MT system best serves the
organisation's multilingual communication and information needs. This is a comparative usability- and adequacy-oriented evaluation
in that it attempts to help such organisations decide which system produces the most adequate output for certain well-defined user types.
To perform the experiment, criteria relating to both users and MT output are examined with reference to the ISLE taxonomy. The
experiment comprises two evaluation phases, the first at sentence level, the second at overall text level. In both phases, evaluators make use of a 1-5 rating scale. Weighted results provide some insight into the systems' usability and adequacy for the purposes described above.
As a conclusion, it i s suggested that further research should be devoted to the most critical aspect of this exercise, namely defining meaningful and useful criteria for evaluating the post-editability and informativeness of MT output. |
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Elia Yuste, Making MT Commonplace in Translation Training Curricula Too Many Misconceptions, So Much Potential, In: Proceedings of the Machine Translation Summit VII, Teaching MT Workshop, Santiago de Compostela, Spain, September 2001. (Conference or Workshop Paper)
This paper tackles the issue of how to teach Machine Translation (MT) to future translators enrolled in a university translation-training course. Teaching MT to trainee translators usually entails two main difficulties: first, a misunderstanding of what MT is really useful for, which normally leads to the misconception that MT output’s quality always equals zero; second, a widespread fear that machines are to replace human translators, consequently leaving them out of work. In order to fight these generalised prejudices on MT among (future) translators, translation instruction should be primarily practical and realistic, as well as learner-centred. It thus ought to highlight the fact that: 1) MT systems and applications are essential components of today’s global multilingual documentation production; 2) the way in which MT is employed in large multilingual organisations and international companies opens up new work avenues for translators. This will be illustrated by two activities, one using commercial MT systems for quick translations, whose process outcome is improved through the trainees’ interaction with the system; the other focusing on MT output comprehensibility by speakers of target language only. MT is thus a mainstream component of a translation-training framework delineated in Yuste (2000) that, by placing the trainee in workplace-like situations, also echoes Kiraly (1999). |
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Abraham Bernstein, Foster Provost, An Intelligent Assistant for the Knowledge Discovery Process, In: IJCAI-01 Workshop on Wrappers for Performance Enhancement in KDD, Morgan Kaufmann, Seattle, WA, August 2001. (Conference or Workshop Paper)
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Antoni Bosch-Doménech, Maria Saez Marti, Cycles of aggregate behavior in theory and experiment, Games and Economic Behavior, Vol. 36 (2), 2001. (Journal Article)
We test in the laboratory the potential of evolutionary dynamics as predictor of actual behavior. To this end, we propose an asymmetric game (which we interpret as a borrower–lender relation), we study its evolutionary dynamics in a random matching setup, and we test its predictions. The theoretical model provides conditions for changes in qualitative aggregate behavior in response to variations in structural parameters. While it turns out that Nash equilibrium is not a reliable predictor of average aggregate behavior, the experiment seems to confirm the qualitative predictions of the evolutionary model under structural changes. Journal of Economic Literature Classification Numbers: C7, C9, E3. |
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David Seidl, J Hendry, Strategic change form a routine perspective, In: 17th European Group for Organizational Studies (EGOS) Colloquium. 2001. (Conference Presentation)
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Thorsten Hens, Marc Oliver Bettzuge, An Evolutionary Approach to Financial Innovation, Review of Economic Studies, Vol. 68 (3), 2001. (Journal Article)
The purpose of this paper is to explain why some markets for financial products take off while others vanish as soon as they have emerged. To this end, we model an infinite sequence of CAPM-economies in which financial products can be used for insurance purposes. Agents' participation in these financial products, however, is restricted. Consecutive stage economies are linked by a mapping (“transition function”) which determines the next period's participation structure from the preceding period's participation. The transition function generates a dynamic process of market participation which is driven by the percentage of informed traders and the rate at which a new asset is adopted. We then analyse the evolutionary stability of stationary equilibria. In accordance with the empirical literature on financial innovation, it is obtained that the success of a financial innovation, a mutation, depends on a sufficiently high trading volume, marketing, and new and differentiated hedging opportunities. In particular, a set of complete markets forming a stationary equilibrium is robust with respect to any further financial innovation while this is not necessarily true for a set of incomplete markets. |
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Helmut Max Dietl, Markus Pauli, Wer die Stadien finanziert - Baustelle Fussball-Arena: FTD-Serie über das Milliardengeschäft mit der Sportart Nummer Eins (Folge 1), In: Financial Times Deutschland, p. 35, 13 June 2001. (Newspaper Article)
Wer die Stadien finanziert; Während sich die Bundesliga-Profis im Urlaub befinden, ist an ihren Arbeitsstätten einiges los. Manche Stadien werden umgebaut, andere abgerissen und neu errichtet. Ziel ist, Austragungsort bei der WM 2006 in Deutschland zu werden. In loser Folge beschreibt diese Serie in den nächsten Wochen die spektakulärsten Veränderungen.. Von Helmut Dietl und Markus Pauli Financial Times Deutschland 13. Juni 2001 |
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Urs Fischbacher, Simon Gächter, Ernst Fehr, Are people conditionally cooperative? Evidence from a public goods experiment, Economics Letters, Vol. 71 (3), 2001. (Journal Article)
We study the importance of conditional cooperation in a one-shot public goods game by using a variant of the strategy-method. We find that a third of the subjects can be classified as free riders, whereas 50% are conditional cooperators. |
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Harry Telser, Peter Zweifel, Measuring willingness-to-pay for risk reduction: an application of conjoint analysis, Health Economics, Vol. 11 (2), 2001. (Journal Article)
This study applies conjoint analysis (CA) to estimate the marginal willingness-to-pay (MWTP) of elderly individuals for a reduction of the risk of fracture of the femur. The good in question is a hypothetical hip protector which lowers the risk of a fracture by different amounts. Other attributes are ease of handling, wearing comfort, and out-of-pocket cost, which are traded off against risk reduction. In 500 face-to-face interviews, pensioners stated whether or not they would buy the product.
Results suggest that MWTP for wearing comfort exceeds that for risk reduction. Indeed, willingness-to-pay for the product as a whole is negative, indicating that it should not be included as a mandatory benefit in health insurance. |
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Daron Acemoglu, Fabrizio Zilibotti, Productivity Differences, Quarterly Journal of Economics, Vol. 116 (2), 2001. (Journal Article)
Many technologies used by the LDCs are developed in the OECD economies and are designed to make optimal use of the skills of these richer countries' workforces. Differences in the supply of skills create a mismatch between the requirements of these technologies and the skills of LDC workers, and lead to low productivity in the LDCs. Even when all countries have equal access to new technologies, this technology-skill mismatch can lead to sizable differences in total factor productivity and output per worker. We provide evidence in favor of the cross-industry productivity patterns predicted by our model, and also show that technology-skill mismatch could account for a large fraction of the observed output per worker differences in the data. |
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Michel Habib, Alexander P Ljungqvist, Underpricing and entrepreneurial wealth losses in IPOs: theory and evidence, Review of Financial Studies, Vol. 14 (2), 2001. (Journal Article)
We model owners as solving a multidimensional problem when taking their firms public. Owners can affect the level of underpricing through the choices they make in promoting an issue, such as which underwriter to hire or on what exchange to list. The benefits of reducing underpricing in this way depend on the owners’ participation in the offering and the magnitude of the dilution they suffer on retained shares. We argue that the extent to which owners trade off underpricing and promotion is determined by the minimization of their wealth losses. Evidence from a sample of U.S. initial public offering confirms our empirical predictions. |
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Helmut Max Dietl, Markus Pauli, Private Investoren halten sich beim Stadionbau zurück - Europaweit Obergrenzen für Spielergehälter nötig, In: Handelsblatt, p. 55, 29 March 2001. (Newspaper Article)
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Egon Franck, C Opitz, Zur Funktion von Studiengebühren angesichts von Informationsasymmetrien auf Humankapitalmärkten, Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung, Vol. 53 (3), 2001. (Journal Article)
Institutions of Higher Education certify students' quality by issuing degrees and other credentials. Information asymmetries between the university and its clients, however, require valid signals of the universities' quality, too. A performance based university compensation scheme can be viewed as a bonding-mechanism. Tuition which is not contingent on the value added through Higher Education extenuates the mechanism's efficiency. We show that tuition nevertheless can create economic value, preventing an adverse selection of wealthy but less talented students and individuals who consume education rather than investing in future earnings. In addition, tuition increases the signaling content of some degrees. Individuals from groups more likely to consume education, like women for example, are able to signal their intention to engage in a lasting and demanding career. Thus, the allocation in some segments of the labor market can be improved. |
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