Information, Knowledge and Belief

The paper models information as possibilities consistent with signals received from the environment. Knowledge is obtained by reasoning about the signals received as well as those that might have been received but were not. The term 'knowledge' is used to refer to those beliefs that are obtained by reasoning about the available information, and nothing else . That is, one ought to be able to fully justify what one knows by means of the information that is available. The term 'belief' is used to refer to those beliefs that are based on information but not necessarily only on information. The author investigates the relationship between information, knowledge and belief, as well as the issue of updating knowledge and belief in response to changes in information.     

Monopoly with resale

We examine the intricacies associated with the design of revenue‐maximizing mechanisms for a monopolist who expects her buyers to resell. We consider two cases: resale to a third party who does not participate in the primary market and interbidder resale, where the winner resells to the losers. To influence the resale outcome, the monopolist must design an allocation rule and a disclosure policy that optimally fashion the beliefs of the participants in the secondary market. Our results show that the revenue‐maximizing mechanism may require a stochastic selling procedure and a disclosure policy richer than the simple announcement of the decision to sell to a particular buyer.     

Attending to inattention: Identification of deadweight loss under nonsalient taxes

Recent developments in behavioral public economics have shown that heterogeneous biases prevent point identification of deadweight loss. We replicate this result for an arbitrary (closed) consumption set, whereas previous results on heterogeneous attention focused on binary choice. We find that one can bound the efficiency costs of taxation based on aggregate features of demand. When individuals have linear demand functions, the bounds for deadweight loss are easy to calculate from linear regressions.     

Institutions and the route to reform of the European Union’s budget revenue, 1970–2017

Using process tracing, this paper charts the history of the changes in the EU’s revenue since 1970, including package deals and the unforeseen consequences of change, comparing the positions of the Council to those of the European Commission and European Parliament. Those revenue decisions allowed European integration to proceed though without a fully autonomous budget as Member States became more careful to calculate their net benefits or costs in relation to the budget. In December 2013, the European Union’s institutions established a High Level Group to recommend changes to the revenue base of the EU’s budget. This reported in January 2017, proposing to resolve the effect of sub-optimal revenue and budget decisions made by the European Union over many years, to reduce direct national contributions, to minimise the risk of unforeseen consequences, and to combine revenue flows with steering effects to discourage certain forms of economic behaviour in line with the wider policy agenda of the European Union.     

Family networks and school enrolment: Evidence from a randomized social experiment

We present evidence on whether and how a household's behavior is influenced by the presence and characteristics of its extended family. Using data from the PROGRESA program in Mexico, we exploit information on the paternal and maternal surnames of heads and spouses in conjunction with the Spanish naming convention to identify the inter- and intra-generational family links of each household to others in the same village. We then exploit the randomized research design of the PROGRESA evaluation data to identify whether the treatment effects of PROGRESA transfers on secondary school enrolment vary according to the characteristics of extended family. We find PROGRESA only raises secondary enrolment among households that are embedded in a family network. Eligible but isolated households do not respond. The mechanism through which the extended family influences household schooling choices is the redistribution of resources within the family network from eligibles that receive de facto unconditional cash transfers from PROGRESA, towards eligibles on the margin of enrolling children into secondary school.     

Stakeholder prioritization and reporting: Evidence from Italy and the US

This study investigates the considerations that might be made by managers when choosing between mutually exclusive stakeholder expectations and reaching and engaging in a dialogue with them. In addition, the study also examines if there are systematic differences across countries (Italy and the US) in the decision to address the concerns of various stakeholder groups. Data was collected from 244 managers and 72 companies simultaneously in two different national business contexts, Italy and the US. The results of the study provide some evidence that managerial perception of three stakeholder group characteristics – power, legitimacy, and urgency – form a parsimonious group of variables that explain the process of stakeholder prioritization. However, only limited support was found for the relationship between salience accorded to a stakeholder group and engagement efforts directed toward the group. The results of the study also show that the managerial decision as to which of the stakeholder groups’ demands to address will be influenced by society-specific expectations. The significance of this study lies in investigating the stakeholder prioritization and engagement process, as it is being practiced, which, one could argue, would help in developing guidelines for effective stakeholder management that stands a realistic chance of being adapted and followed.     

Welfare migration in Europe

The enlargement of the European Union has increased concerns about the role of generous welfare transfers in attracting migrants. This paper explores the issue of welfare migration across the countries of the pre-enlargement European Union and finds a significant but small effect of the generosity of welfare on migration decisions. This effect, however, is still large enough to distort the distribution of migration flows and, possibly, offset the potential benefits of migration as an inflow of mobile labour into countries with traditionally immobile native workers.     

Profiling tourists based on their perceptions of the trustworthiness of different types of peer-to-peer applications

This research profiles tourists based on the extent to which they trust user-generated content (UGC) uploaded in different types of peer-to-peer applications, also considering their socio-demographic characteristics, frequency of travel and motivations for using the Internet and UGC when making their travel choices. For this purpose, latent class segmentation was applied on a sample of 609 Italian tourists and three different clusters were identified, namely: “distrustful tourists”, “untrusted tourists” and “social web tourists”. The findings suggest that hospitality marketers should improve their social media strategy by focusing their attention on Travel 2.0 applications according to the socio-demographic and behavioural characteristics of their target market.     

Groves mechanisms and communication externalities

We put forward a model of private goods with externalities. Agents derive benefit from communicating with each other. In order to communicate they need to operate on a common platform. Adopting new platforms is costly. We first provide an algorithm that determines the efficient outcome. Then we prove that no individually rational and feasible Groves mechanism exists. We provide sufficient conditions that determine when an individually rational Groves mechanism runs a deficit and we characterize the individually rational Groves mechanism that minimizes such deficit whenever it occurs. Moreover, for 2-agent economies, we single out the only feasible and symmetrical Groves mechanism that is not Pareto dominated by another strategy-proof, feasible and symmetrical mechanism.