Dissertation abstract: Experiments on fairness and reputation

The three dissertation essays investigate different aspects of reputation in games where fairness is an important consideration. The first essay studies the effects of reputation on indirect reciprocity in different dictator games. The first experiment places dictators in two environments where they can either give money to the paired player or take money away from them: in one treatment the paired player is a stranger and in the other treatment the dictator has information on the paired player’s reputation. Contrary to anecdotal evidence, the statistical tests show that the dictators’ behavior towards a stranger is not statistically significantly different from their behavior towards an individual with an established reputation. The findings arise because a high proportion of dictators acted purely in their own self interest in both treatments. The data also provides evidence that dictators are more generous when they know that their choices (but not their identities) will be revealed in the future. In the second experiment the dictators’ choices were restricted to only generous actions. In such environment the dictators sent more money on average to recipients with a reputation for being generous than to recipients without a reputation. The second essay explores the ways in which information about others’ actions affects one’s own behavior in a dictator game. The experimental design discriminates behaviorally between three possible effects of recipient’s within-game reputation on the dictator’s decision: reputation causing indirect reciprocity, social influence, and identification. The separation of motives helps to identify the mechanisms of social transmission of impulses towards selfish or generous behavior. The data analysis reveals that the reputation effects have a stronger impact on dictators’ actions than social influence and identification. In the third essay¹ we examine the reputation effects in a labor market setting by analyzing the influence of negative technological shocks on long run relationships between firms and workers. The positive correlation between wage and effort in static conditions has been demonstrated in many experimental studies and has been one of the prominent explanations for the existence of wage rigidity. We subject these findings to further tests in a non-stationary environment that better corresponds to outside-the-lab market conditions. We observe the positive correlation of wages and effort but do not find support for downward wage rigidity in our data. Once the shocks occur, firms lower the wages and relationships often break down. The workers who accept a lower wage respond with exerting a lower effort. JEL Classification C70, C91, D63, D64 ¹Co-authored with Ninghua Du. Dissertation Committee: Dissertation Advisor: James C. Cox Martin Dufwenberg, Price V. Fishback, Ronald L. Oaxaca     

Output decline and the demise of the CMEA and the USSR: The case of Hungary

The direct effect of market losses in CMEA on Hungarian output was 4%, out of the 18% decline registered in gross output in 1988–1992. Total (direct and indirect) effects amounted to 8%. In the same period Hungary's export expansion in western markets led to direct and total effects equivalent to 2.9% and 5.6% of the 1988 output, respectively. The share of reorientation within this switch from east to west was not negligible, it amounted to 19% of respective trade volumes. The 1991 price explosion of imported inputs inhibited the activity of Hungarian firms only moderately, due to earlier realistic domestic prices. In 1991 Hungary suffered a 26% terms of trade loss, and could have experienced an income terms of trade loss of USD 1400 to 1600 million, had the trade volume of 1990 been repeated. Since adjustments in 1991, much smaller income losses accrued. Due to earlier special tax arrangements, much of the burden of terms of trade losses had to be born by the budget.     

Endogenous structural change and crisis in a multiple time-scales growth model

The slow and endogenous twist of economic macro-structure makes up an important evolutionary feature of capitalist economies, and may be at the root of structural crisis. In this line, a Goodwinian growth model with increasing returns and profit-sharing that tries to picture a simple scenario of the seventies crisis is considered. It is shown that the exhaustion of the Kaldor-Verdoorn “productivity law” can entail, in a nonlinear framework, a “catastrophic” bifurcation from a “high” to a “low” growth path. Slow/fast dynamical systems then allow one to formalize a multiple time-scales dynamics where the growth path is shaped by the structural framework in which it takes place, but has also a long -un feedback. Structural change and crisis appear as long term and endogenous outcomes.     

The effects of supportive management and job quality on the turnover intentions and health of military personnel

To be competitive in today's increasingly complex and rapidly changing envi‐ronment, organizations must retain personnel and promote the well‐being of employees. We examine the relationship of both support provided to person‐nel and job quality with employee health and turnover intentions among a sample of 450 military personnel. Factors involving the supportive manage‐ment of personnel (i.e., supervisory support, organizational support, and work‐life balance) and factors pertaining to job quality (i.e., work stimulation and job clarity) were indirectly related to health and to turnover intentions through the mediating influence of job satisfaction. © 2007 Wiley Periodicals, Inc.     

Spanish Economic Review referees (2003-2004)

Spanish Economic Review referees (2003-2004)

Spanish Economic Review referees (2003-2004)     

Growth,Convergence, and Social Cohesion in the European Union

The aim of this paper is to analyze the economic and social cohesion in the European Union. There are different factors to explain the convergence process and besides, empirical findings are not conclusive. To the European Union, GDP per head interregional differences have decreased for certain periods but it has remained unchanged or even increased for others periods. The second report on the economic and social cohesion indicates that some decades are necessary to eliminate regional differences. These differences in regional GDP are mainly explained by differences in their productive structures, degree of innovate activity, communications structures, which depend on the relative level of transport infrastructures, and manpower qualifications. This analysis allows us to obtain some conclusions to the economic policies and the social cohesion. A preliminary version of this paper was presented in the 57th International Atlantic Conference, held in Lisbon, Portugal, March 10–14, 2004.     

A Dynamic Leontief Model with Non-renewable Resources

In this paper we study a generalization of the dynamic Leontief input–output model. We extend the standard dynamic Leontief model with the balance equation of non-renewable resources. Obviously, the non-renewable stocks will decrease, exploiting primary resources. In this study we examine the controllability of this extended model by taking the consumption as the control parameter. Assuming balanced growth for both consumption and production, we investigate how long these scarce resources will cover the input needs of production and how the lifetime of the system depends on the balanced growth rate and on the consumption. In doing so, we apply classic results from control theory and on eigenvalue problems in linear algebra.     

Union games: technological unemployment

Summary. Given a production economy, we define union games by considering strategic behavior of the suppliers of factors. We refer to the Nash equilibria of this game as union equilibria. We analyze situations where the unemployment of factors is supported as a union equilibrium. The degree of unemployment depends on technological conditions. This allows us to model a source of unemployment which differs from the usual sources provided in the literature. We state a limit result that demonstrates that, as the market power of unions decreases, the corresponding sequence of union equilibria converges to the Walrasian equilibrium, that is, to full employment of factors. We also provide some examples that illustrate the main results.Received: 21 October 2004, Revised: 14 December 2004, JEL Classification Numbers: D51, C72. Correspondence to: Emma Moreno-GarcíaE. Moreno acknowledges financial support from the Research Grant BEC2000-1388-C04-01 (Ministerio de Ciencia y Tecnología and FEDER). G. Fernández de Córdoba and E. Moreno acknowledge financial support from the Research Grant SA091/02 from Junta de Castilla y León. We are indebted to C. Alós-Ferrer, C. Pita, D. Anisi, J. A. Ortega, F. Jimeno, J. P. Torres-Martínez, M. Steinert and C. Hervés for helpful comments and insights. We are particularly grateful to T. Kehoe and an anonymous referee for suggestions that improved this paper.     

More pessimism than greediness: a characterization of monotone risk aversion in the rank-dependent expected utility model

Summary. This paper studies monotone risk aversion, the aversion to monotone, mean-preserving increase in risk (Quiggin [21]), in the Rank Dependent Expected Utility (RDEU) model. This model replaces expected utility by another functional, characterized by two functions, a utility function u in conjunction with a probability-perception function f. Monotone mean-preserving increases in risk are closely related to the notion of comparative dispersion introduced by Bickel and Lehmann [3,4] in Non-parametric Statistics. We present a characterization of the pairs (u,f) of monotone risk averse decision makers, based on an index of greediness G _u of the utility function u and an index of pessimism P _f of the probability perception function f: the decision maker is monotone risk averse if and only if . The index of greediness (non-concavity) of u is the supremum of taken over . The index of pessimism of f is the infimum of taken over 0 < v < 1. Thus, , with G _u = 1 iff u is concave. If then , i.e., f is majorized by the identity function. Since P _f = 1 for Expected Utility maximizers, forces u to be concave in this case; thus, the characterization of risk aversion as is a direct generalization from EU to RDEU. A novel element is that concavity of u is not necessary. In fact, u must be concave only if P _f = 1.Received: 10 April 2001, Revised: 18 November 2003, JEL Classification Numbers: D81. Correspondence to: Michéle CohenAlain Chateauneuf, Michéle Cohen, Isaac Meilijson: We are most grateful to Mark Machina, Peter Wakker and two anonymous referees for very helpful suggestions and comments.