Optimal risk taking in an uneven tournament game with risk averse players

We analyze the optimal choice of risk in a two-stage tournament game between two players that have different concave utility functions. At the first stage, both players simultaneously choose risk. At the second stage, both observe overall risk and simultaneously decide on effort or investment. The results show that those two effects which mainly determine risk taking – an effort effect and a likelihood effect – are strictly interrelated. This finding sharply contrasts with existing results on risk taking in tournament games with symmetric equilibrium efforts where such linkage can never arise. Conditions are derived under which this linkage leads to a reversed likelihood effect so that the favorite (underdog) can increase his winning probability by increasing (decreasing) risk which is impossible in a completely symmetric setting.     

Efficiency and productivity change in Ukrainian health care

The study analyses technical efficiency and efficiency change of 193 community hospitals and polyclinics across Ukraine, for the years 1997–2001. These facilities are a subset of the medical institutions in rural Ukraine; they are identical w.r.t. their function in the health system and share the same departmental structure. The data comprise the number of beds in the hospitals, the number of staff employed in the hospitals as well as the polyclinics connected to the hospitals, the number of inpatient and outpatient admissions as well as the number of surgical procedures, lab tests, X-rays performed and the number of deaths and deaths after surgery. Because of the known sensitivity of traditional nonparametric frontier estimators to outlier observations, we employ an order-m estimator, a robust technique, to assess the efficiency of these health care providers as well as changes of their productivity time. The efficiency scores are calculated with an output-oriented model; they are close to unity for hospitals whereas polyclinics seem somewhat less efficient. The Malmquist-indices averaged over all observations are close to unity indicating that productivity does not change over during our observation period. But, depending on the period and the region, substantial deviations from unity can be observed.

Incentive compatibility in non-quasilinear environments

We derive several implications of incentive compatibility in general (i.e., not necessarily quasilinear) environments. Building on Kos and Messner (2013), we provide a (partial) characterization of incentive compatible mechanisms.     

Survey-based forecast distributions for Euro Area growth and inflation: ensembles versus histograms

Ensemble methods can be used to construct a forecast distribution from a collection of point forecasts. They are used extensively in meteorology, but have received little direct attention in economics. In a real-time analysis of the ECB’s Survey of Professional Forecasters, we compare ensemble methods to histogram-based forecast distributions of GDP growth and inflation in the Euro Area. We find that ensembles perform very similarly to histograms, while being simpler to handle in practice. Given the wide availability of surveys that collect point forecasts but not histograms, these results suggest that ensembles deserve further investigation in economics.     

Deploying strategic resources: comparing members of farmer cooperatives to non-members in sub-Saharan Africa

Abstract

Primary producers in global value chains, like any other firm, aim for entrepreneurial success through deploying strategic resources, collective action, strategic intent, and a supportive institutional environment. In the current article, we analyze the extent to which members of farmer cooperatives in Ethiopia succeed in deploying strategic resources. We find that non-members utilize resources more efficiently and that the potential for collective action is not realized. The potential for collective action remains unrealized due to the institutional environment. We suggest pathways for further research.     

The Income Splitting Method: Is it Good for Both Marriage Partners?

Abstract. This paper analyzes how deviating from individual taxation affects married couples. The focus is on time allocation, on investment in family‐specific human capital and on distribution of income within the family. Two insights are discussed in detail. First, the distribution of tax‐reduction gains due to the income splitting system depends on whether the family has been started or not. After marriage, joint taxation increases redistribution among family members. Second, although joint taxation reduces the tax burden of the family, it might harm the marriage partner that is more productive in household production provided that potential marriage partners foresee the effects of joint filing on the time allocation within the family.     

Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining

Abstract. On 11 May 2001, readers of the Berliner Zeitung were invited to participate in an ultimatum bargaining experiment played in the strategy vector mode: each participant chooses not only how much (s)he demands of the DM1,000 pie but also which of the nine possible offers of DM100, 200, …, 900 (s)he would accept or reject. In addition, participants were asked to predict the most frequent type of behavior. Three randomly selected proposer–responder pairs were rewarded according to the rules of ultimatum bargaining and three randomly chosen participants of those who predicted the most frequent type of behavior received a prize of DM500. Decisions could be submitted by mail, fax or via the internet. Behavior is described, statistically analyzed and compared to the usual laboratory ultimatum bargaining results.