Contributions in Merlin

Consider the problem of testing s hypotheses simultaneously. The usual approach tondealing with the multiplicity problem is to restrict attention to procedures that controlnthe probability of even one false rejection, the familiar familywise error rate (FWER). Innmany applications, particularly if s is large, one might be willing to tolerate more than onenfalse rejection if the number of such cases is controlled, thereby increasing the ability of thenprocedure to reject false null hypotheses One possibility is to replace control of the FWERnby control of the probability of k or more false rejections, which is called the k-FWER.nWe derive both single-step and stepdown procedures that control the k-FWER in finitensamples or asymptotically, depending on the situation. Lehmann and Romano (2005a)nderive some exact methods for this purpose, which apply whenever p-values are availablenfor individual tests; no assumptions are made on the joint dependence of the p-values. Inncontrast, we construct methods that implicitly take into account the dependence structurenof the individual test statistics in order to further increase the ability to detect false nullnhypotheses. We also consider the false discovery proportion (FDP) defined as the numbernof false rejections divided by the total number of rejections (and defined to be 0 if therenare no rejections). The false discovery rate proposed by Benjamini and Hochberg (1995)ncontrols E(FDP).

"This paper examines the impact of a public credit registry on the repayment behavior of borrowers. We implement an experimental credit market in which loannrepayment is not third-party enforceable. We compare market outcome with a credit registry to that without a credit registry. This experiment is conducted forntwo market environments: first a market in which interactions between borrowers and lenders are one-off and, second, a market in which borrowers and lenders cannchoose to trade repeatedly with each other. In the market with one-off interactions the credit market collapses without a credit registry as lenders rightly fear that borrowers will default. The introduction of a registry in this environment significantlynraises repayment rates and the credit volume extended by lenders. In the market where repeat transactions are possible a credit registry is not necessary to sustain high market performance. In such an environment relationship banking enforces repayment even when lenders cannot share information, so that there is little valuenadded of a public credit registry."

The paper studies a major human activity – that of watching TV - where many individuals have incomplete control over, and foresight into, their own behavior. As a consequence, they watch more TV than they consider optimal for themselves and their well-being is lower than what could be achieved. Mainly people with significant opportunity costs of time regret the amount of time spent watching TV. They report lower subjective well-being when watching TV fornmany hours. For others, there is no negative effect on life satisfaction from watching TV. Long hours spent in front of a TV are linked to higher material aspirations and anxiety and therewith lower life satisfaction.

The main interest of this paper is to compare the value of education systems of differentncountries. For this reason I use data on workers who have completed their education beforenimmigrating to Switzerland to estimate a country specific return to education. I estimatenthe standard Mincer-equation with the extension that I additionally allow for country specific returns to education. Results show that there are important differences between the returns to different education systems within Switzerland in the value of the basic education on the one hand and the return to an additional year of education on the other hand.

We consider an economy where a finite set of agents can trade on one of two asset markets. Due to endogenous participation the differ in the liquidity they provide. Traders have idiosyncratic preferencesnfor the markets, e.g. due to differential time preferences for maturity dates of futures contracts. For a broad range of parameters we find that nontrade, trade on both markets (individualization) as well as trade on one market only (standardization) is supported by a Nash equilibrium. Byncontrast, whenever the number of traders becomes large, the evolutionary process selects a unique stochastically stable state which corresponds tonthe equilibrium with two active markets and coincides with the welfare maximizing market structure.

We ask whether offering a menu of unemployment insurance contracts is welfare improving in a heterogeneous population. We adopt a repeated moral-hazard framework as in Shavell/Weiss (1979) supplemented by unobservednheterogeneity about agents’ job opportunities. Our main theoretical contribution is an analytical characterizationnof the sets of jointly feasible entitlements that renders annefficient computation of these sets feasible. Our main economicnresult is that optimal contracts for ”bad” searchers tend to be upward-sloping due to an adverse-selection effect.nThis is in contrast to the well-known optimal decreasingntime-profile of benefits in pure moral hazard environmentsnthat continue to be optimal for ”good” searchers in our model.

Risk management and asset pricing benefit from simple functional descriptions of the distribution of real asset returns. Recently, several authors have proposed that asset returns in real stock markets are distributed according to a hyperbolic distribution. While asset returns are generated by trades over time, the natural question is: What does economic theory imply concerning return distributions? We propose a simple model of price formation and, thus, return distribution which is based on economic reasoning. The market’s behavior is represented by a pair consisting of a time-constant strategy and a dynamical trading strategy generating a flow between funds. Simulations of the price dynamics generate returns with fat-tail behavior in line with that of a hyperbolic distribution, and also volatility clustering, which is a mayor stylized fact of asset returns.

This paper examines the determinants of mergers and bankruptcies, using firm level data from the Swiss Business Census and the Dun & Bradstreet exit database for Switzerland (1995-2000). Employing duration analysis, we find considerable differences in the determinants of mergers and bankruptcies, in particular with respect to firm size, location and the impact of macroeconomic conditions. Our results support the notion that mergers are often undertaken to seize growth opportunities.

Right-wing extremism is a serious problem in many societies. A prominent hypothesis states that unemployment plays a crucial role for the occurrence of right-wing extremist crime. In this paper we empirically test this hypothesis. We use a previously not used data set which includes all officially recorded right-wing criminal acts in Germany. These data are recorded by the German Federal Criminal Police Office on a monthly and state level basis. Our main finding is that there is in fact a significant positive relation between unemployment and right-wing criminal activities. We show further that the big difference in right-wing crime between East and West German states can mostlynbe attributed to differences in unemployment. This finding reinforces the importance of unemployment as an explanatory factor for right-wing crime and questions explanations based solely on the different socialization in former communist East Germany and the liberal West German states. Our data furthernallow us to separate violent from non-violent right-wing crimes. We show that unemployment is closelynrelated to both types of crimes, but that the association with non-violent crimes is much stronger. Since right-wing crime is committed particularly by relatively young males, we also explore whethernthe youth unemployment rate is a better predictor for right-wing crime than total unemployment. This hypothesis can be rejected: given total unemployment, a higher share of youth unemployment does not affect right-wing extremist crime rates.

It is a widely held opinion that apprenticeship training represents a net investment for training firms, and that therefore firms only train if they have the possibility to recoup these investments after the training period. A recent study using a new firm-level dataset for Switzerland showed, however, that for 60 percent of the firms, the apprenticeship training itself does not result in net cost. In this context it seems important to examine the question whether the potential net cost of training (during the training period) are a major determinant for the demand for apprentices. Different count data models, in particular hurdle models, are used to estimate the effect of net cost on the demand for apprentices. The results show that the net cost have a significant impact on the training decision but no significant influence on the demand for apprentices, once the firm has decided to train. For policy purposes, these results indicate that subsidies for firms that already train apprentices would not boost the demand for apprentices.