Status and the demand for visible goods: experimental evidence on conspicuous consumption

Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare.     

Economic burden of sarcoidosis in a commercially-insured population in the United States

Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?p?p?Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?<?0.001). Sarcoidosis patients also had significantly more work loss days (15.9 vs 11.3; p?<?0.001) and work loss costs ($3,288 vs $2,527; p?<?0.001) than matched controls. Sarcoidosis imposes an estimated total direct medical cost of $1.3–$8.7 billion to commercial payers, and an indirect cost of $0.2–$1.5 billion to commercial payers in work loss.

Conclusions: Sarcoidosis imposes a significant economic burden to payers in the first year following diagnosis.     

International Norms,Power and the Politics of International Administration: The Kosovo Case

This article examines the practices of governance enacted within the framework of the international administration of Kosovo, which was established in 1999. I analyse the complex interplay between power and the liberal-democratic norms around which the UN-led mission defined its role in the province. The international administration exercised significant power in the legal/institutional reconstruction of the province, and in its systematic attempts to socialise Kosovars into accepting Western-based norms of liberal democracy as the only reasonable foundation of their polity. At the same time, however, the norms advocated by the international administration proved to be the source of a certain degree of power for the people of Kosovo. Specifically, those norms provided the framework within which Kosovars were able to criticise the international administration, and to claim the right to greater participation in decisions regarding the province. Over the past couple of years, Kosovo has witnessed the emergence of a shared normative framework within which the international administrators and Kosovar political elites articulate often competitive truth claims about the problems of the province, and mobilise different forms of power in support of those claims.     

Utilizing a Value of Information Framework to Improve Ore Collection and Classification Procedures

This case study utilizes a value of information decision framework to provide mine managers guidance regarding the purchase of ore grade scanners. LKAB's Kiruna mine produces three types of iron ore to meet long-term contractual agreements on a monthly basis. There is a priori uncertainty regarding the ore type in any given mineable section of the orebody. In addition, there is extracted ore type uncertainty that is introduced by the mining process. These uncertainties are better understood by obtaining more precise (real-time) information. In addition, a better understanding of the uncertainties can improve the quality of operational decisions and increase the overall profitability of the mine. This case study provides a framework for measuring the economic impact of information purchases in a mining context and discusses the implications of those findings.     

Proposal for a capital market-based guaranty scheme for the financial industry

In this paper, we introduce a capital market-based financial guaranty system as an alternative to current insurance guaranty funds and deposit insurance systems. The guaranty system secures clients’ claims for the event of default by the financial company using a special purpose vehicle which issues bonds to investors. The proposed system, analogous to a credit-linked note, consists of one guaranty vehicle for each financial company. In a first step, we present equations in order to derive the two main input parameters of the special purpose vehicle: the premium and the principal. Subsequently, we analyze the impact of different investment actions taken by the financial companies protected by the guaranty vehicle on various shortfall measures. We find that it will be necessary to restrict the investment volume of investors from the financial industry in order to avoid systematic risk within the proposed guaranty scheme. By deriving practical implications, we show that the capital market-based solution has some key benefits compared to current deposit insurance and insurance guaranty schemes.     

Globally correlated nominal fluctuations

Fluctuations in nominal variables—aggregate price levels and nominal interest rates—are documented to be substantially more synchronized across countries at business cycle frequencies than fluctuations in real output. A transparent mechanism accounting for this striking feature of the nominal environment is described and quantitatively evaluated. It is based on the interaction between (small) cross-country spillovers of shocks, Taylor rules, and domestic no-arbitrage conditions. The mechanism is robust to various parameterizations and extensions aligning the model with other important aspects of domestic and international fluctuations. Furthermore, its key features are consistent with cross-country forecasts from Consensus survey.     

Disparities in the financial performance of agricultural entities according to the legal form: the case of Slovakia

Financial management in agricultural enterprises is affected by a range of factors that are not present in other sectors. One of the factors that affect the performance of enterprises is the legal or organizational form of the business. In Slovakia, the specific structure of farms is different from that of almost any other member state of the European Union. The aim of this paper is to evaluate the disparities in the financial performance of agricultural enterprises according to the legal form. We analysed and compared two groups of agricultural entities, agricultural cooperatives and business companies, for the period from 2005 to 2014. Based on an analysis of the differences using mathematical and statistical methods, we can conclude that the legal forms are distinguished in all monitored parameters and our hypothesis on the differences in economic performance of agricultural entities according to legal form was confirmed.     

Effort maximization in asymmetric contest games with heterogeneous contestants

Contest rules are set up by administrators who frequently have discretionary power in specifying the details of these rules, i.e., they can bias the contest rules toward specific contestants in order to further their prime objective. We derive the optimal bias of the contest rule for a contest administrator, who is interested in maximizing the total efforts expended in the contest. The solution is obtained in closed form for a widely used class of n-person contest games. Setting the optimal bias has important implications: (i) there is never exclusion of strong players, instead there is (endogenously induced) inclusion of weak contestants; (ii) the contest administrator will optimally level the playing field by encouraging weak contestants, but he will not equalize the contestants’ chances unless they are identical; and (iii) at least three contestants will be active in equilibrium of the optimal contest, irrespective of heterogeneity.     

Selection of a Representative Value Function for Robust Ordinal Regression in Group Decision Making

In this paper, we introduce the concept of a representative value function in a group decision context. We extend recently proposed methods UTA^GMS-GROUP and UTADIS^GMS-GROUP with selection of a compromise and collective preference model which aggregates preferences of several decision makers (DMs) and represents all instances of preference models compatible with preference information elicited from DMs. The representative value function is built on results of robust ordinal regression, so its representativeness can be interpreted in terms of robustness concern. We propose a few procedures designed for multiple criteria ranking, choice, and sorting problems. The use of these procedures is conditioned by both satisfying different degrees of consistency of the preference information provided by all DMs, as well as by some properties of particular decision making situations. The representative value function is intended to help the DMs to understand the robust results, and to provide them with a compromise result in case of conflict between the DMs.     

The virtual is reality! On physical and virtual space in software firms’ knowledge formation

ABSTRACT

To understand how knowledge is created and exchanged, it is necessary to unwrap the role played by the physical and virtual spaces. The extant research offers interesting findings when it comes to the relationships among regional, institutional and organizational characteristics, innovation and firms’ abilities to link up to global knowledge sources. A focus on the role of informal and low-cost mechanisms, both regional and global, has extended our understanding of their role in knowledge formation. However, the physical space has dominated this literature to the detriment of the virtual space. The inclusion of the virtual space, both as an interaction space and as a different and complementary dimension, makes it possible to gain new insights into knowledge formation in a digitalizing world. Based on in-depth interviews with small- and medium-sized software companies in two urban agglomerations in Norway and Sweden, this paper explores the use of physical and virtual spaces. The findings show that these spaces interact and mutually influence each other. The world is not ‘flattening’ due to ongoing digitalization; moreover, urban agglomerations are still important places in which these spaces are optimized and unified.