Heterogeneity of Players and Aggregate Effort in Contests

We explore the systematic effects of variation in players' heterogeneity on aggregate effort in contests. We show that if costs of effort are convex, a mean‐preserving increase in the variation of players' abilities can lead to an increase or decrease in aggregate effort, both in contests of complete and incomplete information, depending on the curvature of the effort cost function. Specifically, if effort costs are not too steep, aggregate effort increases in ability variation, whereas if effort costs are sufficiently steep, aggregate effort decreases in ability variation.     

Indefinitely repeated contests: An experimental study

Experimental Economics - We experimentally explore indefinitely repeated contests. Theory predicts more cooperation, in the form of lower expenditures, in indefinitely repeated contests with a...     

Incentives of low‐quality sellers to disclose negative information

The paper studies incentives of low‐quality sellers to disclose negative information about their products. We develop a model in which one's quality can be communicated via cheap‐talk messages only. This setting limits the ability of high‐quality sellers to separate, as any communication strategy they pursue can be costlessly imitated by low‐quality sellers. We study two factors that can incentivize low‐quality sellers to communicate their quality: buyers' loss aversion and competition. Quality disclosure reduces buyers' risk, thereby increasing their willingness to pay for the product. It also introduces product differentiation, softening the competition.     

Asymptotic arbitrage and numéraire portfolios in large financial markets

This paper deals with the notion of a large financial market and the concepts of asymptotic arbitrage and strong asymptotic arbitrage (both of the first kind) introduced in Probab. Theory Appl. 39, 222–229 (1994) and in Finance Stoch. 2, 143–172 (1998). We show that the arbitrage properties of a large market are completely determined by the asymptotic behavior of the sequence of the numéraire portfolios related to small markets. The obtained criteria can be expressed in terms of contiguity, entire separation, and Hellinger integrals, provided that these notions are extended to sub-probability measures. As examples, we consider market models on finite probability spaces, semimartingale models, and diffusion models. We also examine a discrete-time infinite horizon market model with one log-normal stock. This work was supported by Southern Federal University, grant No. 26 “Mathematical Finance” and by RFBR, grant 07-01-00520.     

Motivations and Obstacles for Small Business Entrepreneurship in Russia: Fifteen Years in Transition

A longitudinal survey of small business entrepreneurs was conducted in Russia in two stages: in 1994 and in 2008. This study examined entrepreneurial climate and developments in Russia's small businesses with a focus on motivations and obstacles in starting up and operating businesses. It also aimed at analyzing entrepreneurs’ needs for training, consulting, and other types of assistance in a comparative context. Russia's climate for small and medium enterprises (SME) and entrepreneurship has improved, although it is still a work in progress. The 2008 survey indicated younger age, greater share of female entrepreneurs, and remaining small size of the firms. Though the level of SME entrepreneurial activities in Russia is still lower than in major developed economies, the gap is diminishing. Thise study found no significant differences between 1994 and 2008 in terms of entrepreneurial motivations and obstacles; several shifts and trends in motivations and obstacles were identified in their relative importance in SME dynamics.