Delay in contests

Why is there delay in contests? In this paper, we follow and extend the line of reasoning of Carl von Clausewitz to explain delay. For a given contest technology, delay may occur if there is an asymmetry between defense and attack, if the expected change in relative strengths is moderate, and if the additional cost of investment in future strength is low.     

Merger Profitability and Trade Policy

We study the profitability incentives for merger and the endogenous industry structure in a strategic trade policy environment. Merger changes the strategic trade policy equlilibrium. We show that merger can be profitable and welfare enhancing, even though it would not be profitable in a laissez‐faire economy. A key element is a change in the governments’ incentives to give subsidies to their local firms. National merger induces more strategic trade policy, whereas international merger does not.     

The social dynamics of expectations: The interaction of collective and actor-specific expectations on electronic commerce and interactive television

The article investigates three mechanisms by which expectation dynamics affect innovation processes. Empirically, it focuses on hype-disappointment cycles in electronic commerce and interactive television, drawing on results from qualitative case studies and secondary analysis. First, two specific ways by which collective, i.e. widely shared, expectations motivate and guide innovation actors are presented. These mechanisms serve as an explanation for the fact that often an impressively large number of heterogeneous actors accept and contribute to high-rising expectations. With reference to a third mechanism, it is shown that results of technological projects are subject to interpretative flexibility and, as such, are interpreted in the light of the same expectations they are supposed to 'validate'. Sudden changes of the consideration of certain technologies as promising or not are then explained as a result of the interaction between collective expectations and expectations and outcomes at the project level.     

Die demographische Zeitbombe an den Börsen: Das Beispiel Deutschland

Ohne Zusammenfassung     

Adaptation,mitigation and risk-taking in climate policy

The future consequences of climate change are highly uncertain and estimates of economic damages differ widely. Governments try to cope with these risks by investing in mitigation and adaptation measures. In contrast to most of the existing literature, we explicitly model the decision of risk averse governments on mitigation and adaptation policies. We also consider the interaction of the two strategies in presence of uncertainty. Mitigation efforts of a single country trigger crowding out as other countries will reduce their mitigation efforts. This may even lead to lower mitigation on the global scale. In contrast, a unilateral commitment to large adaptation efforts benefits the single country and can reduce the global risk from climate change at the expense of other countries.     

Kernel-based type spaces

Type space is of fundamental importance in epistemic game theory. This paper shows how to build type space if players approach the game in a way advocated by Bernheim's justification procedure. If an agent fixes a strategy profile of her opponents and ponders which of their beliefs about her set of strategies make this profile optimal, such an analysis is represented by kernels and yields disintegrable beliefs. Our construction requires that underlying space is Polish.     

Schuldenkrise in der Europäischen Union

Die Krise Griechenlands w?chst sich zu einer Gefahr für den gesamten Euroraum aus. Wie soll die Europ?ische Union darauf reagieren? Sie befindet sich im Dilemma zwischen Bailout und Bestrafung des „Defizitsünders“. Das erste scheint für den Bestand der W?hrungsunion unvermeidlich, das zweite ist erforderlich, um einen Moral Hazard zu vermeiden.     

Credit risk prediction using support vector machines

The main purpose of this paper is to examine the relative performance between least-squares support vector machines and logistic regression models for default classification and default probability estimation. The financial ratios from a data set of more than 78,000 financial statements from 2000 to 2006 are used as default indicators. The main focus of this paper is on the influence of small training samples and high variance of the financial input data and the classification performance measured by the area under the receiver operating characteristic. The resolution and the reliability of the predicted default probabilities are evaluated by decompositions of the Brier score. It is shown that support vector machines significantly outperform logistic regression models, particularly under the condition of small training samples and high variance of the input data.