Multiple-limit trades: empirical facts and application to lead–lag measures

Order splitting is a standard practice in trading: traders constantly scan the limit order book and choose to limit the size of their market orders to the quantity available at the best limit, thereby controlling the market impact of their orders. In this article, we focus on the other trades, multiple-limit trades that go through the best available price in the order book, or ‘trade-throughs’. We provide various statistics on trade-throughs: frequency, volume, intraday distribution, market impact, etc., and present a new method for the measurement of lead–lag parameters between assets, sectors or markets.     

Democratic public good provision

This paper analyzes an overlapping generation model of redistribution and public good provision under repeated voting. Expenditures are financed through age-dependent taxation that distorts human capital investment. Taxes redistribute income both across skill groups and across generations. We focus on politico-economic Markov equilibria and contrast these with the Ramsey allocation under commitment. The model features indeterminate equilibria, with a key role of forward-looking strategic voting. Due to the lack of commitment to future policies, the tax burden may be on the wrong side of the dynamic Laffer curve. Moreover, restrictions on government policies can in some cases be welfare improving.     

New strategic goals and organizational solutions in large R&D labs: lessons from Centro Ricerche Fiat and Telecom Italia Lab

The issue of corporate R&D management has become particularly relevant during the last decade, since many industrial sectors experienced growing complexity in their research areas and increasing constraints in budgets devoted to R&D activities. This paper discusses the cases of the ICT and automotive sectors, exploring the changes in managerial procedures and strategies that two of the largest corporate research centres in Italy (Telecom Italia Lab and Centro Ricerche Fiat) adopted during a delicate phase of transition.
Both cases are characterized by a growing pressure towards the effective integration of short-term and long-term perspectives, i.e. towards a balance between valorization of research results and competencies, and exploration of new technological trajectories. The solutions adopted by the two organizations are explored and discussed. Specifically, while TiLab focused on the promotion of controlled spin-off companies, CRF has been very active in local technology transfer, especially in favour of SMFs.     

Unemployment vs. Mismatch of Talents: Reconsidering Unemployment Benefits

We develop an equilibrium search-matching model with risk-neutral agents and two-sided ex-ante heterogeneity. Unemployment insurance has the standard effect of reducing employment, but also helps workers to get a suitable job. We show, through calibrations, how the mere difference on unemployment insurance, when countries experience a common skilled-biased technological shock, may result in differences in unemployment, productivity growth and wage inequality. These results are consistent with the contrasting performance of the labour market in Europe and the United States in the last twenty-five years. The model is used to address some political economy issues.     

Economic reforms and industrial policy in a panel of Chinese cities

We study the effect of place-based industrial policy on economic development, focusing on the establishment of Special Economic Zones (SEZ) in China. We use data from a panel of Chinese (prefecture-level) cities from 1988 to 2010. Our difference-in-difference estimation exploits the variation in the establishment of SEZ across time and space. We find that the establishment of a state-level SEZ is associated with an increase in the level of GDP of about 20 %. This finding is confirmed with alternative specifications and in a sub-sample of inland provinces, where the selection of cities to host the zones was based on administrative criteria. The main channel is a positive effect on physical capital accumulation, although SEZ also have a positive effect on total factor productivity and human capital investments. We also investigate whether there are spillover effects of SEZ on neighboring regions or cities further away. We find positive and often significant spillover effects.     

Does the market for ideas influence the rate and direction of innovative activity? Evidence from the medical device industry

Prior work argues that the “market for ideas” supports an open system of innovation, allowing for efficient development of technology across firms. Although this literature has described important features of this market, how it influences the rate and direction of innovation remains an open question. We exploit an exogenous shock to a subset of U.S. medical device firms to study this question. We first document the breakdown in the market for ideas after a federal investigation made it more difficult for the leading orthopedic firms to work with physician‐inventors. We then present evidence of a dramatic decline in the rate of innovation for these firms. Further, a marked shift in direction occurs toward lower‐quality inventions and away from product categories where physician knowledge is critical. Copyright © 2014 John Wiley & Sons, Ltd.     

Retaliatory Equilibria in a Japanese Ascending Auction for Multiple Objects

We construct a family of retaliatory equilibria for the Japanese ascending auction for multiple objects and show that, while it is immune to many of the tacitly collusive equilibria studied in the literature, it is not entirely immune when some bidders are commonly known to be interested in a specific object.