Financial Innovation and Information: The Role of Derivatives When a Market for Information Exists

We study the effects of financial innovation in a model of endogenousinformation acquisition. We determine the conditions under whichthe introduction of a derivative written on an existing stockincreases or decreases the incentive to purchase information.We show that financial innovation produces some effects whichhold across informational structures and others which differ.The former coincide with the few empirical results that arerobust in the literature (effects on prices, risk premia, andvolatility), while the latter coincide with the ones that differexperiment by experiment (effects on volume, correlation betweenvolume and volatility, and market informational efficiency).     

Nominal bargaining power, selection protocol, and discounting in legislative bargaining

The comparative static predictions of the Baron and Ferejohn [Baron, D.P., and Ferejohn, J.A., (1989). Bargaining in legislatures, American Political Science Review 83 (4), 1181-1206] model better organize behavior in legislative bargaining experiments than Gamson's Law. Regressions similar to those employed in field data produce results seemingly in support of Gamson's Law (even when using data generated by simulating agents who behave according to the Baron-Ferejohn model), but this is determined by the selection protocol which recognizes voting blocks in proportion to the number of votes controlled. Proposer power is not nearly as strong as predicted in the closed rule Baron and Ferejohn model, as coalition partners refuse to take the small shares given by the continuation value of the game. Discounting pushes behavior in the direction predicted by Baron and Ferejohn but has a much smaller effect than predicted.     

On pricing lookback options under the CEV process

Abstract We consider the problem of pricing European lookback options when the underlying asset price is driven by a constant elasticity of variance (CEV) process. The evaluation model is based on the binomial approximation developed by Nelson and Ramaswamy (1990) and we show how to apply it in the case of such options. We develop simple pricing algorithms that compute accurate estimates of the option prices.     

Concentration and public policies in the broadcasting industry: the future of television

New technologies are deeply transforming the broadcasting industry. What we have seen so far is only the beginning of a long story. Inevitably, industry regulations must adapt, which means that a wide-ranging rethink of current practices is required. In order to assess the likely evolution of the industry, this article decomposes it into a number of components, from conception of programmes to their broadcasting, including distribution, storage and licensing. Contrary to popular expectations, the analysis suggests that the current high degree of concentration will, if anything, increase. The policy implication is that regulation, so far driven by now obsolete technological constraints, should increasingly emphasize promoting competition.     

SOCIAL COOPERATIVES IN ITALY: ECONOMIC ANTECEDENTS AND REGIONAL DISTRIBUTION

Social cooperatives represent the most notable form of non‐profit organizations operating in Italy in the social services field, the birth and development of which has been strongly linked to, and conditioned by, the needs and resources of territories and communities. This paper intends to demonstrate how certain socio‐economic factors, recognized in economic literature as antecedents of the development of social enterprises, may account for the spread of social cooperatives in different Italian regions. Furthermore, the research results demonstrate an inter‐regional differentiation of the shape social cooperation has entered into in Italy.     

Definitions of ambiguous events and the smooth ambiguity model

We examine a variety of preference-based definitions of ambiguous events in the context of the smooth ambiguity model. We first consider the definition proposed in Klibanoff et?al. (Econometrica 73(6):1849?C1892, 2005) based on the classic Ellsberg two-urn paradox (Ellsberg Q J Econ 75:643?C669, 1961) and show that it satisfies several desirable properties. We then compare this definition with those of Nehring (Math Soc Sci 38(2):197?C213, 1999), Epstein and Zhang (Econometrica 69:265?C306, 2001), Zhang (Econ Theory 20:159?C181, 2002), and Ghirardato and Marinacci (J Econ Theory 102:251?C289, 2002). Within the smooth ambiguity model, we show that Ghirardato and Marinacci (J Econ Theory 102:251?C289, 2002) would identify the same set of ambiguous and unambiguous events as our definition while Epstein and Zhang (Econometrica 69:265?C306, 2001) and Zhang (Econ Theory 20:159?C181, 2002) would yield a different classification. Moreover, we discuss and formally identify two key sources of the differences compared to Epstein and Zhang (Econometrica 69:265?C306, 2001) and Zhang (Econ Theory 20:159?C181, 2002). The more interesting source is that these two definitions can confound non-constant ambiguity attitude and the ambiguity of an event.     

A disaggregated analysis of the export performance of some industrial and emerging countries

The paper describes the evolution of export shares and quantifies the contribution of geographical and sectoral specialization as well as that of “competitiveness” of some industrial and emerging market economies between 1985 and 2003. While the strong growth of emerging countries as world competitors has lowered the market shares of all industrial countries, the results of a constant-market-share analysis indicate that the latter have benefited from positive specialization effects. Specifically, industrial countries gained from being specialized in fast-growing sectors (high-tech) or destinations (Asia). The magnitude of these effects, however, has been quite diversified across the main countries. Among the emerging economies, the striking export growth of China was determined by a strong rise in competitiveness that allowed the country to gain market shares across all sectors and destinations.