The willingness to pay–willingness to accept gap: A failed replication of Plott and Zeiler

The well-known willingness to pay–willingness to accept (WTP–WTA) gap refers to the observation that individuals attach a higher value to objects they own (WTA) than to objects they do not own (WTP). We report on experiments to re-investigate the possibility that the WTP–WTA gap arises from subject misconceptions due to experimental procedures as suggested by Plott and Zeiler (2005). The contribution of this paper is two-fold: first, we attempt to replicate the findings by Plott and Zeiler that the WTP–WTA gap disappears when using procedures that are aimed at reducing misconceptions, such as extensive training and practice rounds for the BDM mechanism. However, we fail to do so as the WTP–WTA gap persists in the main task where subjects state their WTA or WTP for a mug. Second, we use the paid practice rounds to identify subjects without apparent misconceptions and find that also for those subjects who never make dominated choices in the lottery tasks, the WTP–WTA gap in the mug task exists. Thus, we find no evidence of the idea that subject misconceptions are the main source of the WTP–WTA gap.     

Crime prediction by data-driven Green’s function method

We develop an algorithm that forecasts cascading events, by employing a Green’s function scheme on the basis of the self-exciting point process model. This method is applied to open data of 10 types of crimes happened in Chicago. It shows a good prediction accuracy superior to or comparable to the standard methods which are the expectation–maximization method and prospective hotspot maps method. We find a cascade influence of the crimes that has a long-time, logarithmic tail; this result is consistent with an earlier study on burglaries. This long-tail feature cannot be reproduced by the other standard methods. In addition, a merit of the Green’s function method is the low computational cost in the case of high density of events and/or large amount of the training data.     

Existence of solutions to principal–agent problems with adverse selection under minimal assumptions

We prove an existence result for the principal–agent problem with adverse selection under general assumptions on preferences and allocation spaces. Instead of assuming that the allocation space is finite-dimensional or compact, we consider a more general coercivity condition which takes into account the principal’s cost and the agents’ preferences. Our existence proof is simple and flexible enough to adapt to partial participation models as well as to the case of type-dependent budget constraints.     

An improved bound for the Shapley–Folkman theorem

We provide an up to 30% improvement in the Shapley–Folkman theorem error-bound, and briefly discuss its consequences for the course allocation problem.     

The State as Both Regulator and Player: The Politics of Transfer of Development Rights in China

The conventional argument that the introduction of transfer of development rights (TDR) shifts the power of land use regulation from the state to the market is increasingly under challenge. In China, the state's grip on land is reinforced through TDR, in which the state is both regulator and player. This state-dominated form of TDR affects China in three ways. First, competing aspirations of different scales of government complicate how TDR is implemented. Although the central state promotes TDR to maintain a national balance of arable land, some local states instrumentalize it to expand their landed basis of accumulation. Secondly, TDR tends to benefit the state but not its people. It may increase the fiscal income of the sending government and lessen the land shortage of the receiving government, but sometimes at the expense of the interests of land users without land ownership. Thirdly, given the state's deep involvement in TDR programs, the key for China's TDR to protect arable land lies not so much in clear property rights or a fully fledged market as in effective checks and balances regarding the state's powers over TDR. These three observations attest to the embeddedness of TDR in the local political economy.     

Hedging and pricing early-exercise options with complex fourier series expansion

We introduce a new numerical method called the complex Fourier series (CFS) method proposed by Chan (2017) to price options with an early-exercise feature—American, Bermudan and discretely monitored barrier options—under exponential Lévy asset dynamics. This new method allows us to quickly and accurately compute the values of early-exercise options and their Greeks. We also provide an error analysis to demonstrate that, in many cases, we can achieve an exponential convergence rate in the pricing method as long as we choose the correct truncated computational interval. Our numerical analysis indicates that the CFS method is computationally more comparable or favourable than the methods currently available. Finally, the superiority of the CFS method is illustrated with real financial data by considering Standard & Poor’s depositary receipts (SPDR) exchange-traded fund (ETF) on the S&P 500® index options, which are American options traded from November 2017 to February 2018 and from 30 January 2019 to 21 June 2019.     

An economic evaluation of market development programmes for US dairy products

‘This study measured the effectiveness of US dairy export promotion programmes on increasing foreign demand and enhancing producers’ revenues. An import demand equation based on panel data was used to test whether export promotion has a positive and significant impact on US dairy exports. The effects of various promotion scenarios on the dairy market were then simulated, and benefit–cost ratios (BCRs) for these programmes were estimated. There were three key findings. First, the combined effort of public and private dairy export promotion expenditures had a positive and statistically significant impact on demand for US dairy products in the world market. The findings indicated that export promotion stimulated total dairy exports by 4.14 billion pounds, on average, per year, which represented 55.8% of total exports. Second, US dairy export promotion has been highly profitable for the nation’s dairy farmers. The calculated BCRs, based on assumed elasticity of supply, ranged from a low of 8.54 for the most elastic assumption to a high of 30.12. Third, from an optimality standpoint, dairy farmers are underinvesting in export promotion. The marginal BCRs ranged from a low of 3.79 to a high of 15.22, which means that, at the margin, increasing export promotion expenditures would be profitable for dairy farmers.     

An economic analysis of the Cattlemen’s Beef Promotion and Research Board demand-enhancing programmes

The research reported here addressed two objectives. The first objective was to measure the overall impact of the Cattlemen’s Beef Board as well as eight-specific advertising, promotion and research activities on US beef demand. The second objective was to compute marginal benefit–cost ratios (BCRs) for the eight individual checkoff activities and for the overall programme. The results indicated that Cattlemen’s Beef Board’s Promotion activities increased total domestic beef demand by 15.7 billion pounds in total, or 2.1 billion pounds per year between 2006 and 2014. Collectively, the overall marginal BCR for all Cattlemen’s Beef Board activities was $11.20.     

DEVELOPMENT PRESSURES AND HERITAGE IN THE PERTH CENTRAL BUSINESS DISTRICT, 1950–90

This article examines the remaking of Perth's Central Business District (CBD) during the 1950–90 period. It traces the establishment of a modernist development ethos in Perth's planning, outlines the inadequacy of the City's planning regulations, and analyses the impact on St George's Terrace, the city's main commercial thoroughfare. The City Council was largely incapable of restraining excessive development and the extension of its system of plot ratios encouraged manipulation to increase the height of developments. Several important historic buildings were demolished because there were no legal means of safeguarding the city's heritage until 1990.     

The emergence of home-based accommodations in Iran: A study of self-organization

This paper examines the Iranian home-based accommodation sector using the theory of self-organization. With the aim of identifying the sector's organizing principles, interviews were conducted with the accommodation operators, providing 117 statements which were linked based on their key ideas and/or words. Using UCINET6, a network diagram of five organizing principles were identified: collective identity, balanced legitimacy, local embeddedness, mindful market, and networked finance. While the combination of these organizing principles is interpreted within the Iranian context, broad assumptions can be inferred. It is speculated that a collective aiming to organize itself needs to be considerate of its interactions with members of the collective, the authoritative body, the local community, the market, and capital. Additionally, each separate organizing principle might have relevance for small businesses in various industries. The study contributes to the commercial home and home-based accommodation literature while also providing insights into tourism development in Iran. Furthermore, the method used to identify organizing principles is considered novel and can be used with other collectives.