Net neutrality and asymmetric platform competition

Journal of Regulatory Economics - In this paper we analyze the interplay between access to the last-mile network and net neutrality in the market for Internet access. We consider two competing...     

Do people really want to be informed? Ex-ante evaluations of information-campaign effectiveness

Experimental Economics - We develop a method to assess population knowledge about any given topic. We define, and rationalize, types of beliefs that form the ‘knowledge spectrum’. Using...     

Sources of Dependence and Strategies to Innovate: Evidence from Video Game SMEs

Recent studies call for reconsideration of the predictions of resource dependence theory, in light of contemporary industrial and economic environments. This study accordingly investigates the influence of dependence on the strategic choice to innovate by focusing on a rarely studied topic, namely, the sources of dependence. In studying small and medium‐sized video game enterprises, this paper provides empirical validation of dependence phenomena. These companies have limited resources, which inevitably creates dependence, exacerbated in innovative contexts because of the prevalence of negative effects, such as opportunism, abuse of power, limited innovation, or inequitable distributions of economic value. To deal with these negative effects, some enterprises use cooperation or integration strategies to try to minimize their dependence. The strategic choice then might be conditioned. The results of a comparative and qualitative study of five video game developers show that a lack of resources and skills is the primary source of dependence. In addition, a hierarchy of sources of dependence seems to guide the strategic choices of developers to innovate.     

Ancestry and development: New evidence

We revisit the relationship between ancestral distance and barriers to the diffusion of development by replicating previous results with a new genomic dataset on human microsatellite variation. We find a statistically and economically significant effect of ancestral distance from the technological frontier on income per capita. The historical pattern of the effect is hump shaped, peaking between 1870 and 1913, and declining steeply afterwards. This suggests that ancestral distance acts as a temporary barrier to the diffusion of development. We also find that ancestral distance from the frontier is a barrier to the spread of specific technologies and institutions in modern times.     

Preference erosion and market access liberalization: the African dilemma in multilateral negotiations on agriculture

African countries, especially sub-Saharan ones, have conflicting interests in multilateral negotiations on agriculture. On the one hand, their economies may be boosted by the price effect induced by agricultural liberalization. On the other hand, multilateral tariff cuts will result in the erosion of preferential margins. Based on an original methodology, using CGE modeling, detailed tariff calculations and predictive analysis, this paper investigates the potential impact of current multilateral negotiations on the value of preferences for African agriculture. It estimates the preferential value to USD 0.7 billion of welfare and USD 1 billion of exports to the Triad markets. Furthermore, it highlights the “cruel dilemma” African countries face in current negotiations, as they gain from ambitious trade liberalization, despite the large preferential erosion, while they suffer from noticeable trade and welfare losses under conservative scenarios.

Agricultural Credit Subsidies and Farmland Values in Canada

The objective of this study is to determine the impact of farm credit subsidies on the value of farmland in Canada. The price-components model based on the capitalization principle is developed and estimated using the pooled data from four selected provinces (Quebec, New Brunswick, Manitoba and Saskatchewan) from 1972 to 1991. The results show that increases (decreases) in interest subsidies are expected to increase (decrease) farmland and building values. However, the short-term impact is estimated to be small. The regional analysis shows that the abolition of interest subsidies across the country is likely to have a relatively higher impact on land and building values in Quebec than in the prairie provinces.     

Measuring the Dynamic Gains from Trade

This article investigates the links between trade policy andeconomic growth in a panel of 57 countries between 1970 and1989. It develops a new measure of trade policy openness basedon the policy component of trade shares, using it in a simultaneousequations system to identify the effect of trade policy on severaldeterminants of growth. The results suggest a positive impactof openness on economic growth, with the accelerated accumulationof physical capital accounting for more than half the totaleffect; enhanced technology transmission and improvements inmacroeconomic policy account for smaller effects. This decompositionis robust with respect to alternative specifications and timeperiods. The article also successfully tests whether the modelexhaustively captures the effects of trade policy on growth.     

Bounds for VIX futures given S&P 500 smiles

We derive sharp bounds for the prices of VIX futures using the full information of S&P 500 smiles. To that end, we formulate the model-free sub/superreplication of the VIX by trading in the S&P 500 and its vanilla options as well as the forward-starting log-contracts. A dual problem of minimizing/maximizing certain risk-neutral expectations is introduced and shown to yield the same value.The classical bounds for VIX futures given the smiles only use a calendar spread of log-contracts on the S&P 500. We analyze for which smiles the classical bounds are sharp and how they can be improved when they are not. In particular, we introduce a family of functionally generated portfolios which often improves the classical bounds while still being tractable; more precisely, they are determined by a single concave/convex function on the line. Numerical experiments on market data and SABR smiles show that the classical lower bound can be improved dramatically, whereas the upper bound is often close to optimal.     

‘When buying into the business,we knew it was seasonal’: perceptions of seasonality in Central Otago,New Zealand

Although the majority of the academic literature makes a convincing economic case when suggesting that seasonality is problematic, it is, arguably, equally important to consider whether businesses themselves perceive seasonality as a distinct problem. This paper considers the extent to which businesses and operations, variably involved in tourism, perceive seasonality. A case study of the Central Otago region of New Zealand is offered. The results suggest that although seasonality is perceived as a salient issue for the sector itself, it is not universally perceived to be inherently problematic from the perspective of the individual business/operator. Copyright © 2004 John Wiley & Sons, Ltd.     

Do remittances support consumption during crisis? Evidence from Kosovo

This paper focuses on the effect of remittances on per capita consumption over time in a context of conflict, war-to-peace transition and crisis. We use two household surveys from Kosovo with unique timing, one collected immediately after the civil war in 2000 and the other during the economic crisis in 2010. This territory, in which the tension among ethnic groups is the focus of international concern, is one of the top remittance-receiving countries in the world. We examine the effect of remittances not only at the average level of consumption, but also at various parts of the distribution of consumption using quantile regressions. We find that remittances alleviate poverty by enhancing the consumption level of the most vulnerable households, and the positive effect of remittances on consumption has remained constant between 2000 and 2010. This result may be connected with the resilience of remittances.