Decentralized trade, random utility and the evolution of social welfare

We study decentralized trade processes in general exchange economies and house allocation problems with and without money. The processes are affected by persistent random shocks stemming from agents’ maximization of random utility. By imposing structure on the utility noise term—logit distribution—one is able to calculate exactly the stationary distribution of the perturbed Markov process for any level of noise. We show that the stationary distribution places the largest probability on the maximizers of weighted sums of the agents’ (intrinsic) utilities, and this probability tends to 1 as noise vanishes.     

Economic performance and international trade engagement: the case of Portuguese manufacturing firms

By combining economic and financial data for Portuguese manufacturing firms with data on their exports and imports, we uncover some aspects of the relationship between international trade engagement and firms’ performances. In line with recent theoretical and empirical developments in the international trade literature: (i) we testify that Portuguese international trade is highly concentrated, especially on the import side, and both in inter- and intra-sector terms; (ii) we corroborate previous studies and theses according to which two-way traders outperform only importers, only exporters and above all domestic firms; (iii) we find that the greater the diversification of markets and goods (especially with regard to imports), the better the performance achieved by internationalised firms; (iv) we notice that the higher the intensity of firms’ international trade (especially imports), the better their performance; (v) we also present evidence that destination markets for exports and origin markets for imports are also important in explaining firm’s performance.     

Bargaining, coalitions and competition

We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walrasian allocations of the economy. Our method of proof makes use of the theory of the core. With respect to previous work, our positive implementation result applies to a substantially larger class of economies: the model relaxes differentiability and convexity of preferences, and also admits an arbitrary number of divisible and indivisible goods.     

The effects of offshoring on wages: a meta-analysis

Review of World Economics - Offshoring, either as FDI or offshore outsourcing, is a phenomenon of increasing importance that has been widely studied in the economics literature. Studies analysing...     

Does Teacher Subject Knowledge Contribute to Student Academic Performance in Developing and Least Developed Countries?

Little is known about the causal impact of teacher knowledge on student performance. In this research paper we intend to approach the potential causal effect (i.e. going beyond correlation) of sixth grade teachers’ knowledge on their students’ academic achievement for three Sub-Saharan African countries. To achieve this, we have used the heterogeneity of teachers’ subject knowledge and students’ correspondent academic achievement within-student between-subjects using student fixed effects. Concretely, our work is based on previous research by Bietenbeck, Piopiunik and Wiederhold. Compared to them, we do not use countries that lack representative information after keeping only those students taught by the same teacher for the subjects under analysis. This enables us to obtain more reliable results on this issue. Our results indicate that teacher subject knowledge in reading and mathematics does not have a significant influence on student academic achievement in these subjects for the countries under scrutiny. Many robustness checks have corroborated this conclusion, which contrasts with the positive effect found by Bietenbeck, Piopiunik and Wiederhold.     

Directed technical change and environmental quality

Portuguese Economic Journal - We propose a directed technical change model with two sectors, clean and dirty, to analyze the impact of the degree of substitutability between sectors and the degree...     

Epistemic Conditions for Equilibrium in Beliefs without Independence

Aumann and Brandenburger [Econometrica63(1995), 1161–1180.] provide sufficient conditions on the knowledge of the players in a game for their beliefs to constitute a Nash equilibrium. They assume, among other things, mutual knowledge of rationality. By rationality of a player, it is meant that the action chosen by him maximizes his expected utility, given his beliefs. There is, however, no need to restrict the notion of rationality to expected utility maximization. This paper shows that their result can be generalized to the case where players' preferences over uncertain outcomes belong to a large class of non-expected utility preferences.Journal of Economic LiteratureClassification Numbers: C72, D81.     

Reflections from Employers on the Disabled Workforce: Focus Groups with Healthcare,Hospitality and Retail Administrators

Historically, employment rates for people with disabilities have been low. Despite legislation that prohibits the discrimination of this group in work settings, employers are reluctant to hire people with disabilities. The purpose of this qualitative study was to explore the experiences of employers with workers with disabilities. Three focus groups were conducted with 21 administrators from three business sectors (i.e., healthcare, hospitality, and retail). Content analysis indicated five primary themes: (1) importance of disability employment agencies and disability advocates; (2) persistence of manager bias; (3) lack of promotion opportunities; (4) costs associated with having workers with disabilities; and (5) benefits associated with having workers with disabilities. Implications include the need for intervention studies that address the challenges experienced by individuals with disabilities, particularly during hiring and promoting phases of employment, and educational efforts to inform administrators and managers of the few costs and numerous benefits associated with having workers with disabilities.     

Parisian types of ruin probabilities for a class of dependent risk-reserve processes

For a rather general class of risk-reserve processes, we provide an exact method for calculating different kinds of ruin probabilities, with particular emphasis on variations over Parisian type of ruin. The risk-reserve processes under consideration have, in general, dependent phase-type distributed claim sizes and inter-arrivals times, whereas the movement between claims can either be linear or follow a Brownian motion with linear drift. For such processes, we provide explicit formulae for classical, Parisian and cumulative Parisian types of ruin (for both finite and infinite time horizons) when the clocks are phase-type distributed. An erlangization scheme provides an efficient algorithmic methods for calculating the aforementioned ruin probabilities with deterministic clocks. Special attention is drawn to the construction of specific dependency structures, and we provide a number of numerical examples to study its effect on probabilities.     

The responsibility of tourism in traffic congestion and hyper-congestion: A case study from Mallorca, Spain

This paper explores the relationship between tourism and traffic congestion and hyper-congestion using the case study of Mallorca (Spain), one of the most important resort destinations in the Mediterranean. After discussing different proxies to capture the associated problems to road traffic congestion, different time series models are estimated including considering the days of the week, holidays and meteorological determinants jointly with a daily indicator of tourist population pressure. Results show how the tourist pressure variable is an important determinant in explaining the different alternative indicators of traffic congestion and hyper-congestion, for different roads. Hence it is possible to classify the roads in terms of usage by tourists in order to anticipate the levels of traffic intensity, especially during peak periods.