Higher education, elite institutions and inequality

We develop a model of higher education to analyze the effects of elite institutions on individual educational decisions and aggregate labor market outcomes. Elite institutions allow the most talented of a given population to separate themselves from the larger pool of agents enrolled in higher education, and to earn the associated wage premium in the labor market. As elite institutions engage in cream skimming, the returns to publicly accessible education decrease, and enrollment in public higher education declines. The resulting effect on income inequality is ambiguous, since elite education increases income dispersion at the top of the income distribution, and decreases income dispersion at the bottom.     

Cognitive abilities and behavioral biases

We use a simple, three-item test for cognitive abilities to investigate whether established behavioral biases that play a prominent role in behavioral economics and finance are related to cognitive abilities. We find that higher test scores on the cognitive reflection test of Frederick [Frederick, S., 2005. Cognitive reflection and decision-making. Journal of Economic Perspectives 19, 25–42] indeed are correlated with lower incidences of the conjunction fallacy and conservatism in updating probabilities. Test scores are also significantly related to subjects’ time and risk preferences. Test scores have no influence on the amount of anchoring, although there is evidence of anchoring among all subjects. Even if incidences of most biases are lower for people with higher cognitive abilities, they still remain substantial.     

Manufacturing restructuring and the role of real exchange rate shocks

Using a new and extensive micro data set we investigate the impact of a change in international competitive pressure on industrial performance and restructuring. Unlike previous studies we are able to account for the heterogeneity across firms in their exposure to foreign competition. We focus on a situation akin to a natural experiment, and examine the impact of a sharp real appreciation of the Norwegian Krone in the early 2000s on Norwegian manufacturing firms which differ substantially in their trade orientation. A change in the real exchange rate (RER) affects a firm through three different channels: (i) firm's export sales, (ii) firm's purchases of imported inputs, and (iii) import competition faced in the domestic market. Unlike previous studies, we are able to examine all three channels. Both net exporters and import-competing firms were exposed to increased competition due to the real appreciation. Both groups reacted by shedding labor, but only the first group experienced increasing labor productivity. Partly, the productivity improvements came from measured TFP gains, while capital deepening does not appear to have been affected by the shock.     

Herding,contrarianism and delay in financial market trading

Herding and contrarian behaviour are often-cited features of real-world financial markets. Theoretical models of continuous trading that study herding and contrarianism, however, usually do not allow traders to choose when to trade or to trade more than once. We present a large-scale experiment to explore these features within a tightly controlled laboratory environment. Herding and contrarianism are more pronounced than in comparable studies that do not allow traders to time their decisions. Traders with extreme information tend to trade earliest, followed by those with information conducive to contrarianism, while those with the theoretical potential to herd delay the most. A sizeable fraction of trades is clustered in time.     

Contradictory approaches? On realism and constructivism in the social sciences research on risk, technology and the environment

This article discusses approaches to researching the risk-problems of industrial societies. It examines why the risk-constructivism neglects questions of the material production of risks in favor of questions of their communicative construction, while the risk-realism does it the other way round. Subsequently the possibilities of a synthesis of both approaches are being considered. The societal functions of risk-constructions are accordingly not limited to their efficacy in the sphere of social communication processes. They lie as well in the field of regulation of the metabolism of societies and their ecological environment. The validity of risk-constructions is consequently not only bound to their cultural weightiness, whether one believes in them or not, but to their capacity to manage realities, measured by their ability to bring expectations in accordance with events. Risk-constructions are not only transformed in the milieu of discourses, but also in the context of social practices which give the opportunity to acquire experiences and to perform learning processes in order to optimize risk-constructions as regulative instruments.     

The Britney Spears universe: Social media and viral marketing at its best

Britney Spears is one of the most successful female recording artists in contemporary music, world-wide. Herein, we analyze how Britney Spears and her team of employees rely on social media applications to communicate around this pop icon, and create and maintain her celebrity brand image. Specifically, we look at the use of social media during the launch of her single ‘Hold It Against Me’ and the associated album Femme Fatale in early 2011. The interplay of postings on Twitter, YouTube, and Facebook—combined with comments on her webpage, BritneySpears.com—can be seen as a prime example of social media usage to support new product introductions.     

PARADIGM DEPLETION,KNOWLEDGE PRODUCTION AND RESEARCH EFFORT: CONSIDERING THOMAS KUHN'S IDEAS

This paper deals in a Stackelberg differential game with Kuhn (1962) ideas of paradigm depletion and resiliency. Paradigm is considered as potential knowledge, as a stock of ideas that can be harvested to produce science. The results are: (i) paradigm depletion can be optimal, (ii) the optimal editor's shadow price of potential knowledge must be non‐positive, if it is positive, the editor is a keeper of the orthodoxy rather than a scientist, (iii) editor's and/or researcher's impatience is bad for science, and (iv) in equilibrium editor's behavior does not matter for research effort, while only editor's behavior matter for the paradigm.