Within-series momentum in hockey: No returns for running up the score

Drawing on data from 916 Division 1 men’s college hockey games played during a recent six-year period in the Western Collegiate Hockey Association (WCHA), we find evidence that positive momentum within 458 two-game series does not exist when controlling for team quality. We find that neither victory nor the margin of victory in Game 1 of a two-game series is predictive of the outcome of Game 2. We suggest that loss aversion should be considered in relation to questions of momentum.     

Skating on thin ice: rule changes and team strategies in the NHL

Abstract.  In an effort to stimulate a more exciting and entertaining style of play, the National Hockey Association (NHL) changed the rewards associated with the results of overtime games. Under the new rules, teams tied at the end of regulation both receive a single point, regardless of the outcome in overtime. A team scoring in the sudden-death 5-minute overtime period would earn an additional point. Prior to the rule change in the 1999–2000 season, the team losing in overtime would receive no points while the winning team earned 2 points. This paper presents a theoretical model to explain the effect of the rule change on the strategy of play during both the overtime period and the regulation time game. The results suggest that under the new overtime, format equally powerful teams will play more offensively in overtime resulting in more games decided by a sudden-death goal. The results also suggest that while increasing the likelihood of attacking in overtime, the rule change would have a perverse effect on the style of play during regulation by causing them to play conservatively for the tie. Empirical data confirm the theoretical results. The paper also shows that increasing the rewards to a win in regulation time would prevent teams from playing defensively during regular time.     

Buyer search and price dispersion: a laboratory study

We study markets with costly buyer search in which sellers simultaneously post prices. Buyers costlessly observe one or (with probability 1−q) two of the posted prices, and can accept one or pay to search again. The experiment varies q, the search cost, and the number of buyers. Equilibrium theory predicts a unified very low (high) price for q=0 (q=1) and predicts specific distributions of dispersed prices for q=1/3 and 2/3. Actual prices conform closely to the predictions in some treatments. Buyers’ reservation prices are biased away from the extremes, however, and sellers’ prices have positive autocorrelation and cross-sectional correlation.     

Non-constant discounting in continuous time

This paper derives the dynamic programming equation (DPE) to a differentiable Markov Perfect equilibrium in a problem with non-constant discounting and general functional forms. Beginning with a discrete stage model and taking the limit as the length of the stage goes to 0 leads to the DPE corresponding to the continuous time problem. The note discusses the multiplicity of equilibria under non-constant discounting, calculates the bounds of the set of candidate steady states, and Pareto ranks the equilibria.     

Do people tip strategically,to improve future service? Theory and evidence

Abstract.  A central question about tipping is whether people tip strategically, to improve future service, or only because tipping is a social norm. I present a theoretical model that incorporates psychological utility associated with tipping (because it is a social norm) and allows tipping to be motivated also by future service considerations. The model predicts that if future service is a reason for tipping, the sensitivity of tips to service quality should be higher for repeating customers than for non-repeating ones. Surveys of 597 restaurant customers are analysed and suggest that future service is not a reason for tipping.     

Working under pressure: Evidence from the impacts of soccer fans on players’ performance

In this paper we study how pressure affects individual’s behavior. For this purpose we use sports data, where the attendance is a proxy for pressure, to investigate if the number of fans in the stadium affects the performance of the players. We overcome the reverse causality problem by proposing an instrument variable: a promotion in Brazil during which low cost tickets were assigned to random soccer matches. In contrast to previous literature, our results suggest that pressure does not significantly affect players’ behavior.     

Consumer inertia, firm growth and industry dynamics

We develop a model of firm size, based on the hypothesis that consumers are “locked in,” because of search costs, with firms they have patronized in the past. As a consequence, older firms have a larger clientele and are able to extract higher profits. The equilibrium of this model yields: (i) A downward sloping density of firm sizes. (ii) Older firms are less likely to exit than younger firms. (iii) Larger firms spend more on R&D.     

Is America’s National Pastime too time consuming?

World Series telecasts are now an inferior good. Income and the time cost of consumption interact so that a ten percent income increase reduces viewership by 1.8 million households. Increased availability of substitutes reduces ratings but increased drama improves them.     

Good turnover and bad turnover: Barriers to business and productivity

Entrepreneurship, as reflected in industry turnover rates, is a central force behind output and productivity growth. However, cross country comparisons suggest that turnover rates are remarkably independent of barriers to business: Singapore, one of the most entry-friendly countries in the world, has the same industry turnover rate as Uzbekistan, a country where entry is considerably more difficult. In this paper, I suggest the solution to this apparent puzzle lies in the effect of survival barriers, which, like entry barriers, are higher in Uzbekistan than in Singapore. In other words, with similar turnover rates, Singapore is characterized by “good” turnover, whereas Uzbekistan is characterized by “bad” turnover.     

Improving Work Incentives and Incomes for Parents: The National and Geographic Impact of Liberalising the Family Tax Benefit Income Test*

The effective tax rates and possible work disincentives created by Australia’s tax and welfare systems have been receiving extensive policy attention in recent years. Family Tax Benefit‐Part A (FTB‐A) is one of the key causes of high effective marginal tax rates for many families. This study uses national and spatial microsimulation models to evaluate the national and local impacts of a possible FTB‐A reform option, which involves reducing the income test withdrawal rate associated with the FTB‐A income test. The modelling suggests that the option would be an effective way to reduce high effective marginal tax rates for around 415,000 parents of FTB‐A children, would benefit around 850,000 families, and would deliver additional assistance to middle income families living on the outskirts of our cities.     

Search, migration, and urban land use: The case of transportation policies

We develop a search-matching model with rural-urban migration and an explicit land market. Wages, job creation, urban housing prices are endogenous and we characterize the steady-state equilibrium. We then consider three different policies: a transportation policy that improves the public transport system in the city, an entry-cost policy that encourages investment in the city and a restricting-migration policy that imposes some costs on migrants. We show that all these policies can increase urban employment but the transportation policy has much more drastic effects. This is because a decrease in commuting costs has both a direct positive effect on land rents, which discourages migrants to move to the city, and a direct negative effect on urban wages, which reduces job creation and thus migration. When these two effects are combined with search frictions, the interactions between the land and the labor markets have amplifying positive effects on urban employment. Thus, improving the transport infrastructure in cities can increase urban employment despite the induced migration from rural areas.     

Optimal limited authority for principal

This article studies a principal-agent problem where the only commitment for the uninformed principal is to restrict the set of decisions she makes following a report by the informed agent. We show that an ex ante optimal equilibrium for the principal corresponds to a finite partition of the state space, and each retained decision is ex post suboptimal for the principal, biased toward the agent?s preference. Generally an optimal equilibrium does not maximize the number of decisions the principal can credibly retain. Compared to no commitment, limited authority improves the quality of communication from the agent. As a result, it can give the principal a higher expected payoff than delegating the decision to the agent.     

奥运会投资风险问题的理性思考

采用文献资料、比较分析、逻辑分析等方法,重点对奥运会投入模式、结构、预算与风险问题进行了分析,结果显示:结合型投入模式更有利于奥运会的产出效益,降低直接投入与间接投入的比值、建立科学的预算体系是规避奥运会投资风险的重要保证.