The Core of Large Differentiable TU Games

For suitable non-atomic TU games ν, the core can be determined by computing appropriate derivatives of ν, yielding one of two stark conclusions: either core(ν) is empty or it consists of a single measure that can be expressed explicitly in terms of derivatives of ν. In this sense, core theory for a class of games may be reduced to calculus. Journal of Economic Literature Classification Number: C71.     

Monotone continuous multiple priors

Summary. In a multiple priors model á la Gilboa and Schmeidler (1989), we provide necessary and sufficient behavioral conditions ensuring the countable additivity and non-atomicity of all priors.Received: 25 November 2002, Revised: 24 June 2004, JEL Classification Numbers: D81.We thank Roko Aliprantis, Maristella Botticini, Erio Castagnoli, Larry Epstein, Paolo Ghirardato, Itzhak Gilboa, Luigi Montrucchio, David Schmeidler, Marciano Siniscalchi, an Associate Editor, and an anonymous referee for helpful discussions. Fabio Maccheroni and Massimo Marinacci gratefully acknowledge the financial support of MIUR and NOMOS Sistema (Milano).     

How good can heuristic-based forecasts be? A comparative performance of econometric and heuristic models for UK and US asset returns

This paper systematically investigates the sources of differential out-of-sample predictive accuracy of heuristic frameworks based on internet search frequencies and a large set of econometric models. The volume of internet searches helps gauge the degree of investors’ time-varying interest in specific assets. We use a wide range of state-of-the-art models, both of linear and nonlinear type (regime-switching predictive regressions, threshold autoregressive, smooth transition autoregressive), extended to capture conditional heteroskedasticity through GARCH models. The predictor variables investigated are those typical of the literature featuring a range of macroeconomic and market leading indicators. Our out-of-sample forecasting exercises are conducted with reference to US, UK, French and German data, both stocks and bonds, and for 1- and 12-months-ahead horizons. We employ several forecast performance metrics and predictive accuracy tests. Internet-search-based models are found to perform better than the average of all of the alternative models. For several country-asset-horizon combinations, particularly for UK bond returns, our heuristic models compare favourably with sophisticated econometric methods. The heuristic models are also shown to perform well in forecasting realized volatility. The baseline results are supported by several extensions and robustness checks, such as using alternative search keywords, controlling for Fama–French and Cochrane–Piazzesi factors, and implementing heuristic-based trading strategies.     

Venture Capital Investments in Europe and Portfolio Firms' Economic Performance: Independent Versus Corporate Investors

Using a new European Commission‐sponsored longitudinal dataset—the VICO dataset—we assess the impact of independent (IVC) and corporate venture capital (CVC) investments on the economic performance of European high‐tech entrepreneurial firms during the period 1992–2010. After controlling for potential sources of endogeneity and selection bias, our results indicate that both IVC and CVC investments boost portfolio firms' economic performance. These effects are mostly due to an increase in real sales value. Moreover, the dynamics of the impact of VC investments on firms’ overall economic performance and its components—real sales value, real fixed assets, and real labor costs—differs depending on the type of investor. Finally, we do not detect any impact related to the syndication of investments by both IVC and CVC investors.     

Self-reflexive networks: Theory · topology · applications

We present a new type of Artificial Neural Networks: the Self-Reflexive Networks. We utter the theoretical presuppositions; their dynamics is analogous to the one ascribed to autopoietic systems: self-referentiality, unsupervised learning and unintentionally cooperative and contractual activities of their own units. We also hypothesize a new concept of perception. We present the basic equations of Self-Reflexive Networks, new concepts as the one of dynamic target, of Re-entry with dedicated and fixed connections, of Meta-Units. Therefore, we experiment a specific type of Self-Reflexive Networks, the Monodedicated, within the interpretation of a toy-DB and we have hinted at other already made experimentations, experimentations in process and planned experimentations. From the applicative work that we present a few specifics and novelties of this type of Neural Networks emerge:

1. the capability of answering to complex, strange, wrong or not precise questions, through the same algorithms through which the learning phase took place.
2. the capability of spontaneously transforming their own learning inaccuracy in analogic capability and original self-organization capability.
3. the capability of spontaneously integrate the models that it experienced in different moments in an achronical hyper-model.
4. the capability of behaving as it had explored a decisions graph of large dimensions, both deeply and in extension. With the consequence of behaving as an Addressing Memory forself-dynamic Contents.
5. the capability of always learning, rapidly and anyway, besides the complexity of the learning patterns.
6. the capability of answering simultaneously from different points of view, behaving, in this case, as a network that builds more similarity models for each vector-stimulus that it receives.
7. the capability of adjusting in a biunivocal way, each question to the consulting DB and each DB to the question that are submitted. The consequence of this fact is the continuous creation of new answering models.
8. the capability of building during the learning phase, a weights matrix that provides a subconceptual representation of the bi-directional relations between each couple of input variables.
9. the capability, through the Metaunits, to integrate in a unitary typology, nodes with different saturation speed and, therefore, with different memory: in fact, while the SR units are short memory nodes, since each new stumulus zeros the previous stimulus, the Metaunits memorize the SR different stimulus during time, functioning as an average length memory. This fact should confirm that the avarage length memory is of a different level from the immediate memory and that it is based only uponrelation among perceptive stimulus which are distributed in parallel and in sequence. In this context the weights matrix constitute the SR long term memory. And in this sense it will be opportune to think at a methodic through which the Metaunits can influence during time, the same weights matrix. In any case, in the SR there areservice nodes orfilter nodes andlearning nodes as if they were weights (the Metaunits).

     

A DYNAMIC ENTRY AND PRICE GAME WITH CAPACITY INDIVISIBILITY

Strategic market interaction is here modelled as a two‐stage game in which potential entrants choose capacities and next active firms compete in prices. Due to capital indivisibility, the capacity choice is made from a finite grid and there are economies of scale. In the simplest version of the model with a single production technique, the equilibrium turns out to depend on the ratio between the level of total output at the long‐run competitive equilibrium and the firm's minimum efficient scale: if that ratio is sufficiently large (the market is sufficiently ‘large’), then the competitive price emerges at a subgame‐perfect equilibrium of the capacity and price game; if not, then the firms randomize in prices on the equilibrium path. The role of the market size for the competitive outcome is shown to be even more important if there are several available production techniques.     

Internationalization and industrial districts: evidence from the Italian automotive supply chain

In this paper we focus on the determinants of internationalization and, in particular, on the specific role played by the agglomeration of small and medium sized enterprises (SMEs) through their proximity to a large firm. We study the characteristics of the internationalization process in a representative sample of 786 firms in the Italian automotive supply chain. After building an Internationalization Strategy Index (ISI), we perform a multinomial logit econometric analysis. The main findings of the empirical analysis are: (a) Italian automotive supplier firms mainly go in the foreign markets through export, i.e. the simplest internationalization mode; (b) as predicted in the literature, individual firm characteristics play a significant role in the probability of internationalization; (c) firms located in the province of Turin, where the dominant car assembler (Fiat) in Italy has its headquarters, or more generally, in large automotive industry districts, enjoy a clear localization advantage; (d) interestingly, we also find that internationalization is negatively correlated with the share of Fiat in suppliers’ sales, and that suppliers located in a district and less dependent on Fiat are also those adopting the most advanced internationalization strategies.     

Procyclical Productivity and Output Growth in China: An Econometric Analysis

This paper analyzes the procyclical behavior of Chinese Total Factor Productivity (TFP). It shows that measured Solow residuals are correlated to the growth rate of real imports per worker and to other macroeconomic variables that fluctuate at cyclical frequencies. The magnitude of the trend shift in TFP after the start of economic reforms in 1978 is found to be robust to the introduction of cyclical factor utilization and other systematic influences on productivity. The propagation mechanisms of macroeconomic shocks to output are also evaluated on the basis of a seven-variable VAR system. The empirical results indicate that the growing openness of the economy has contributed to sustaining the observed long run productivity increases and has raised spatial inequality.     

Marx and the Development of Critical Political Economy

Abstract

Although relevant analytical developments were provided over time by the critique of economic theory, they did not succeed in inhibiting the occurrence of a full-fledged revival of the neoclassical interpretation of capitalism. The development of critical economics and its capability of checking the influence of the dominant economic culture have been especially prejudiced by the failed integration between the analyses of Marx and Keynes. Following Keynes, once the ‘inducement to invest’ had been singled out as the central question for the explanation of output levels, one should have promptly acknowledged that on this very question Marx's analysis was significantly richer and more relevant than Keynes's—the richness and relevance of the former ultimately resting on the great attention Marx dedicated to the complex question of the influence of income distribution on the capitalists’ incentive to invest. It is argued in the article that through the study of this influence Marx succeeded in putting together the essential elements of a critical theory of effective demand, based on the principles and mechanisms that govern the distribution of income between profits and wages.     

A functional perspective on financial networks

The financial sector is a critical component of any economic system, as it delivers key qualitative asset transformation services in terms of liquidity, maturity and volume. Although these functions could in principle be carried out separately by specialized actors, in the end it is their systemic co-evolution that determines how the aggregate economy performs and withstands disruptions. In this paper we argue that a functional perspective on financial intermediation can be usefully employed to investigate the functioning of financial networks. We do this in two steps. First, we use previously unreleased data to show that focusing on the economic functions performed over time by the different institutions exchanging funds in an interbank market can be informative, even if the underlying topological structure of their relations remains constant. Second, a set of alternative artificial histories are generated and stress-tested by using real data as a calibration base, with the aim of performing counterfactual welfare comparisons among different topological structures.