On the formation of interaction networks in social coordination games

There are many situations where two interacting individuals can benefit from coordinating their actions. We examine the endogenous choice of partners in such social coordination games and the implications for resulting play. We model the interaction pattern as a network where individuals periodically have the discretion to add or sever links to other players. With such endogenous interaction patterns we see multiple stochastically stable states of play, including some that involve play of equilibria in the coordination game that are neither efficient nor risk-dominant. Thus the endogenous network structure not only has implications for the interaction pattern that emerges, but it also has a significant impact on the play in the coordination game relative to what would arise if the same interaction network were exogenous.     

Increasing returns and unsynchronized wage adjustment in sunspot models of the business cycle

A challenge to models of equilibrium indeterminacy based on increasing returns is that required increasing returns for generating indeterminacy can be implausibly large and rise quickly with the relative risk aversion in labor. We show that unsynchronized wage adjustment via a relative wage effect can both lower the required degree of increasing returns for indeterminacy to a plausible level and make it invariant to the relative risk aversion in labor. Consequently, indeterminacy and sunspot-driven fluctuations can emerge for plausible increasing returns regardless of the relative risk aversion in labor. Our model generates reasonable dynamics in terms of matching the business cycle, and sunspot shocks become more important with labor market friction.     

A review and validation of overall survival extrapolation in health technology assessments of cancer immunotherapy by the National Institute for Health and Care Excellence: how did the initial best estimate compare to trial data subsequently made available?

Background: Validation of overall survival (OS) extrapolations of immune-checkpoint inhibitors (ICIs) during the National Institute for Health and Care Excellence (NICE) Single Technology Assessment (STA) process is limited due to data still maturing at the time of submission. Inaccurate extrapolation may lead to inappropriate decision-making. The availability of more mature trial data facilitates a retrospective analysis of the plausibility and validity of initial extrapolations. This study compares these extrapolations to subsequently available longer-term data.

Methods: A systematic search of completed NICE appraisals of ICIs from March 2000 to December 2017 was performed. A targeted search was also undertaken to procure published OS data from the pivotal clinical trials for each identified STA made available post-submission to NICE. Initial Kaplan-Meier curves and associated extrapolations from NICE documentation were extracted to compare the accuracy of OS projections versus the most mature data.

Results: The review identified 11 STAs, of which 10 provided OS data upon submission to NICE. The extrapolations undertaken considered parametric or piecewise survival models. Additional data cut-offs provided a mean of 18 months of OS beyond the end of the original data. Initial extrapolations typically under-estimated OS from the most mature data cut-off by 0.4–2.7%, depending on the choice of assessment method and use of the manufacturer- or ERG-preferred extrapolation.

Conclusion: Long-term extrapolation of OS is required for NICE STAs based on initial immature OS data. The results of this study demonstrate that the initial OS extrapolations employed by manufacturers and ERGs generally predicted OS reasonably well when compared to more mature data (when available), although on average they appeared to underestimate OS. This review and validation shows that, while the choice of OS extrapolation is uncertain, the methods adopted are generally aligned with later-published follow-up data and appear appropriate for informing HTA decisions.     

The geography of giving: The effect of corporate headquarters on local charities

Does the presence of corporate headquarters in a city affect the incomes of local charities? To address this question we combine data on the head office locations of publicly traded U.S. firms with information on the receipts of local charitable organizations. Cities like Houston, San Jose, and San Francisco gained significant numbers of corporate headquarters over the past two decades, while cities like Chicago and Los Angeles lost. Our analysis suggests that attracting or retaining the headquarters of a publicly traded firm yields approximately $3–10 million per year in contributions to local non-profits. Likewise, each $1000 increase in the market value of the firms headquartered in a city yields $0.60–1.60 to local non-profits. Most of the increase in charitable contributions is attributable to an effect on the number of highly-compensated individuals in a city, rather than through direct donations by the corporations themselves. The increased private sector donations from the presence of corporate headquarters do not seem to crowd out government grants to local charities.     

Management Buyouts and Firm–Level Productivity: Evidence from a Panel of UK Manufacturing Firms

This paper presents an empirical investigation of the productivity effects of UK management buyouts (MBOs) over the period 1986–1997. It is the first study to use an augmented production function approach in order to determine and quantify: the Hicks–neutral productivity, the marginal productivity of labour, and the marginal productivity of capital effects of MBOs. The main findings are consistent with MBOs providing incentive and control systems that lead to improved firm–level productivity in the post–buyout organisation via reduced agency costs, debt bonding, and monitoring by buyout specialists.     

Tax–preferred savings accounts and marginal tax rates: evidence on RRSP participation

The effect of taxes on participation in Registered Retirement Savings Plans between 1982 and 1996 is studied. Interprovincial changes in the tax structure over this period provide identifying variation. Using this variation, I find that taxes influence households' participation decisions, but more weakly than previously estimated. A 10 percentage point increase in the marginal tax rate is estimated to increase the probability of participation by 8 per cent. This explains only 5.1 per cent of the trend in participation. I also find suggestive evidence that the carryforward mechanism may be used as an instrument for tax base smoothing. JEL Classification: H24
Comptes d'épargne fiscalement privilégiés et taux marginaux d'imposition : résultats sur la participation aux régimes enregistrés d'épargne retraite (REER). Ce mémoire étudie les effets du régime d'imposition sur la participation aux régimes enregistrés d'épargne retraite (REER) entre 1982 et 1996. Les changements dans la structure d'imposition d'une province à l'autre au cours de la période fournissent un éventail de possibilités. Utilisant cet éventail, l'auteur découvre que le régime fiscal influence les décisions de participer des ménages, mais plus faiblement qu'on l'avait estimé précédemment. Un accroissement de 10 pour cent dans le taux marginal d'imposition accroît la probabilité de participation de 8 pour cent. Voilà qui explique seulement 5,1 pour cent de la tendance dans la participation. L'auteur découvre aussi que le mécanisme de report dans le temps de la portion inutilisée de la contribution aux REER peut être utilisé comme instrument de lissage de la base de revenus imposables.     

Eurosystem monetary targeting: Lessons from U.S. data

Using a small empirical model of inflation, output, and money estimated on U.S. data, we compare the relative performance of monetary targeting and inflation targeting. The results show monetary targeting to be quite inefficient, yielding both higher inflation and output variability. This is true even with a nonstochastic money demand formulation. Our results are also robust to using a P∗ model of inflation. Therefore, in these popular frameworks, there is no support for the prominent role given to money growth in the Eurosystem's monetary policy strategy.     

Sustainable Power Generation in Europe: A Panel Data Analysis of the Effects of Market and Environmental Regulations

Environmental and Resource Economics - Climate change and greenhouse gas emissions have become increasingly more pressing environmental concerns in European policy agenda. Environmental energy...     

Means-Testing the Child Benefit

Improving the distributional impact of transfers may be costly if it reduces labor supply. In this paper we show how effects of changes in the design of the child benefit program can be examined by employing information from behavioral and non-behavioral simulations on micro data. The direct distributional effects are assessed by tax-benefit model calculations, while female labor supply responses to alternative child benefit schemes are simulated under the assumption that choices are discrete. Distributional effects after labor supply responses are also shown. The study confirms that greater targeting of the child benefit is traded against reductions in female labor supply.