Hedge-Fonds als Asset-Klasse: Betrachtungen aus der Perspektive der deutschen Versicherungswirtschaft

The over performance of hedge funds until the current financial market turbulences led to a large number of insurers increasing their hedge funds quota. In the following this asset class is examined and particularly analyzed with respect to its adequacy for an insurance company's asset allocation by focusing on the axiom of safety, as demanded by national law. The problem of survivorship-bias and the Markowitz requirements of normal-distribution and constant correlations among the asset classes and their impact on a strategic asset allocation are studied.     

Geothermische Stromerzeugung in Deutschland — Stiefkind oder schlafender Riese?

This contribution analyses the development of power generation from geothermal energy in Germany. It considers research funding schemes, the support through the german Renewable Energy Sources Act (EEG) and the role of decisive actors as well as technical, economic and societal framework conditions. Compared to other renewable energy sources research funding for geothermal energy had played an inferior role in the past. After the potentials for geothermal power generation had been underlined by a study in 2003, geothermal power gained more political and institutional advocates. Subsequently it was equipped with a higher tariff in the EEG 2004 and led to realization of demonstration projects. Yet, the appliance of technologies for electrical power transformation, ORC and Kalina, are at the very beginning. Presently, the geothermal energy industry consists of a small amount of medium-sized businesses. Regional and nationwide energy providers, acting as operators and investors, do not exert much pressure in view of limited returns. Despite the compatibility with existing power supply systems, constraints to the expansion of geothermal energy use — above all exploration risks and high drilling costs- are likely to lead to a step-by step enhancement rather than a rush.     

Misjudging the character of the welfare state: Hayek,generality, and the knowledge problem

What are the limits of collective action? As James Buchanan famously worried, is it possible to empower the productive state without lapsing into the predatory state? This paper uses insights from F.A. Hayek to address problems of public goods and the role of the state. Hayek convincingly argued that no central planner has sufficient knowledge to run an economy. Yet Hayek also allowed for state provision of some goods beyond the prevention of coercion. The question, then, is whether Hayek’s safeguards offer a satisfactory response to Buchanan’s worry. This paper contends that Hayek violated his own conditions for permissible government activity. Nevertheless, he offers a serious research agenda for limiting state abuses.     

How Does the Minimum Wage Affect Firm Investments in Fixed and Human Capital? Evidence from China

This paper empirically analyzes the impact of Chinese minimum wage regulations on the firm decision to invest in physical and human capital. We exploit the geographical and inter‐temporal variations of county‐level minimum wages in a panel data set of all state‐owned and all above‐scale non‐state‐owned Chinese firms covering the introduction of the new Chinese minimum wage regulations in 2004. In our basic regressions including all Chinese firms, we find significant negative effects of the minimum wage on human capital investment rates and no overall effects on fixed capital investment rates. When grouping firms by their ownership structure, we find that these results hold for most firms. Foreign‐owned firms are an exception to some extent, because the likelihood that they invest in human capital has not decreased in response to the policy.     

On the Incentive Effects of Sample Size in Monitoring Agents – A Theoretical and Experimental Analysis

When agents compete for a bonus and their productivity in each of several possible occasions depends stochastically on (constant) effort, the number of times this is checked to assign the bonus affects the level of uncertainty in the selection process. Uncertainty, in turn, is expected to increase the effort made by competing agents (Cowen and Glazer, 1996; Dubey and Haimanko, 2003; Dubey and Wu, 2001). Theoretical predictions are derived and experimental evidence is collected for two competing agents, with the bonus awarded to that agent who outperforms the other. Sampling occasions (1 or 3), cost of production (high or low), cost symmetry (asymmetric or symmetric), and piece‐rate reward are manipulated factorially to test the robustness of the effects of uncertainty. For control, a single‐agent case is included. Results indicate that, for tournaments, greater uncertainty does indeed lead to greater than expected effort and lower average variable costs.     

Liberalization of Opening Hours with Free Entry

Abstract. This paper studies competition in prices and opening hours in a model with free entry. It is shown that under free competition market failures arise: Entry is excessive and opening hours are under‐provided. The larger the demand elasticity, the larger market failures are going to be. Restrictions on opening hours aggravate this failure. We analyze the impact of a liberalization of opening hours. The model predicts that prices will remain constant in the short run but increase in the long run. Concentration in the retail sector will rise. Additionally, employment in the retail sector increases.     

The European Union and Kaliningrad: Taking the Low Road

there is no abstract     

The effects of cognitive ability and high school quality on college entry decisions: nonparametric estimation of parameters of interest

The decisions to attend college are analysed and nonparametric predictions compared to those obtained from the widely used logit model. The impacts of measured cognitive ability and proxies for high school quality on the decisions to attend college are examined for a sample of white and black males and females from the USA. Two different parameters of interest which isolate the effects of ability and high school quality on college entry decisions are described and estimated by ‘integrating out’ the effect of other covariates. It is found that measured cognitive ability is an extremely important determinant of college entry for all race and gender groups. At the same point in the ability distribution, blacks are more likely to select into college than whites, and females more likely than males of the same racial group. Proxies for high school quality such as teacher education, student teacher ratios, school enrolment and library size are shown to have little or no effects on the likelihood of college entry for all race and gender groups. Further, predictions obtained from the flexible nonparametric analysis are found to be quite similar to those obtained from the logit model, suggesting that simpler fully parametric binary choice models perform quite well as modelling college entry decisions.     

The role of shorting,firm size,and time on market anomalies

We examine the role of shorting, firm size, and time on the profitability of size, value, and momentum strategies. We find that long positions make up almost all of size, 60% of value, and half of momentum profits. Shorting becomes less important for momentum and more important for value as firm size decreases. The value premium decreases with firm size and is weak among the largest stocks. Momentum profits, however, exhibit no reliable relation with size. These effects are robust over 86 years of US equity data and almost 40 years of data across four international equity markets and five asset classes. Variation over time and across markets of these effects is consistent with random chance. We find little evidence that size, value, and momentum returns are significantly affected by changes in trading costs or institutional and hedge fund ownership over time.