Rational exuberance

We study a two-player investment game with information externalities. Necessary and sufficient conditions for a unique symmetric switching equilibrium are provided. When public news indicates that the investment opportunity is very profitable, too many types are investing early and investments should therefore be taxed. Conversely, any positive investment tax is suboptimally high if the public information is sufficiently unfavorable.     

Gut beraten

Beratungsaufgaben nehmen heute im T?tigkeitsfeld von Pflegefachkr?ften einen immer breiteren Raum ein. Doch was umfasst pflegerische Beratung und wie lassen sich Beratungskompetenzen erlernen?     

Price Stability and the Case for Flexible Exchange Rates

We revisit Friedman’s case for flexible exchange rates in a small open economy with several distortions and rigidities and a variety of domestic and external shocks. We find that, for external shocks, the flexible exchange rate regime outperforms the fixed regime independent of the source of domestic nominal rigidities provided that the monetary authorities pursue a policy of strict inflation targeting. For domestic supply shocks, a joint policy of a flexible exchange rate and strict inflation targeting fares well when the main source of nominal rigidities is in the domestic goods markets, but not if rigidities arise in the labor markets.     

Transfer Fees in Professional Soccer

International Advances in Economic Research -     

INFORMATION AND PRICE DISPERSION: THEORY AND EVIDENCE

Limited information is the key element generating price dispersion in models of homogeneous-goods markets. We show that the global relationship between information and price dispersion is an inverse-U shape. We test this mechanism for the retail gasoline market using a new measure of information based on commuter data from Austria. Commuters sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers. Our empirical estimates are in line with the theoretical predictions. We also quantify how information affects average prices paid and the distribution of surplus in the gasoline market.     

Manipulation of voting schemes with restricted beliefs

In this paper we define manipulation with restricted beliefs as the possibility for some voter to have an insincere preference ordering that dominates the sincere one within the given individual beliefs over other agents’ preferences. We then show that all non-dictatorial voting schemes are manipulable in this sense, up to a given threshold.     

In search of efficient network structures: the needle in the haystack

Searching for efficient networks can prove a very difficult analytical and even computational task. In this paper, we explore the possibility of using the genetic algorithms (GA) technique to identify efficient network structures in the case of non-trivial payoff functions. The robustness of this method in predicting optimal networks is tested on the two simple stylized models introduced by Jackson and Wolinsky (1996), for which the efficient networks are known over the whole state space of the parameters’ values. This approach allows us to obtain new exploratory results in the case of the linear-spatialized connections model proposed by Johnson and Gilles (Rev Econ Des 5:273–299, 2000), for which the efficient allocation of bilateral connections is driven by contradictory forces that push either for a centralized structure around a coordinating agent, or for only locally and evenly distributed connections. Murat Yıldızoğlu gratefully acknowledges the support of the CCRDT program of Aquitaine Region.     

Active ageing beyond the labour market: evidence on the role of intrinsic and extrinsic rewards at work

‘Active Ageing’ strategies aim to foster the participation of seniors in the society. Although economic literature has extensively studied the incentives for seniors to increase their labour supply, little is known about the motivations for older people to complement labour with other forms of social participation. This article provides empirical evidence of the role of intrinsic and extrinsic rewards received at work in the supply of formal and informal productive activities of 50- to 65-year-old workers. The results show that workers with higher levels of intrinsic rewards received at work, such as skill development opportunities and decision latitude, are more likely to participate in social activities outside the labour market. Extrinsic rewards on the other hand, like advancement perspectives, job security and pay, appear independent from both formal and informal social participation.     

Understanding Changes in the Distribution and Redistribution of Income: A Unifying Decomposition Framework

In recent decades income inequality has increased in many developed countries but the role of tax and transfer reforms is often poorly understood. We propose a new method allowing for the decomposition of historical changes in income distribution and redistribution measures into: (i) the immediate effect of tax‐transfer policy reforms in the absence of behavioral responses; (ii) the effect of labor supply responses induced by these reforms; and (iii) a third component allowing us to explore the effect of changes in the distribution of a wide range of determinants, including the effect of employment changes not induced by policy reforms. The application of the decomposition to Australia reveals that the direct effect of tax‐transfer policy reforms accounts for half of the observed increase in income inequality between 1999 and 2008, while the increased dispersion of wages and capital incomes also played an important role.