Hayek on the essential dispersion of market knowledge

The Review of Austrian Economics - A key insight in Hayek’s thought is the importance of so-called “local knowledge” in economic activity. In The Fatal Conceit, he states that...     

Patterns of Investor-State Dispute Settlement Decisions

This paper examines the pattern of settlements, investor wins and state wins in investor-state dispute settlement cases, focusing on the impact of arbitration rules, the resources and experience of the litigants, the type of treaty breach under investigation, and the pattern of state intervention. Logistic regression results show that settlements are more likely when investors do not disclose their allegations publicly, when the host state has been involved in a greater number of past cases, and when the respondent state has a higher control-of-corruption rating. Panel awards to investors are more likely in cases of alleged direct expropriation and less likely for indirect expropriation. Panel decisions favoring the state increase with higher per capita income and rule-of-law ratings.     

Asymmetric effects of housing wealth on college enrolment

We investigate the impact of housing wealth, credit availability and financial distress on college enrolment decisions. We find that housing wealth is negatively related to enrolment in public schools and positively related to enrolment in private schools. This evidence suggests that, on average, students substituted away from private schools towards public institutions during the recent financial crisis.     

Liking what others “Like”: using Facebook to identify determinants of conformity

In this paper we explore the micro-level determinants of conformity. Members of the social networking service Facebook express positive support to content on the website by clicking a Like button. We set up a natural field experiment to test whether users are more prone to support content if someone else has done so before. To find out to what extent conformity depends on group size and social ties we use three different treatment conditions: (1) one stranger has Liked the content, (2) three strangers have Liked the content, and (3) a friend has Liked the content. The results show that one Like from a single stranger had no impact. However, increasing the size of the influencing group doubled the probability that subjects expressed positive support. Friendship ties were also decisive. People were, on average, four times more likely to press the Like button if a friend, rather than a stranger, had done so before them. The existence of threshold effects in our experiment clearly shows that both group size and social proximity matters when opinions are shaped.     

Cuba,Trade Dependency and the GATT/WTO System

Cuba sought economic independence from the U.S. and its reliance on sugar exports after its 1959 revolution, but subsequently developed new dependency relationships. In the meantime, Cuba remained inside the General Agreement on Tariffs and Trade (GATT), despite conducting most of its trade outside it. This paper explores the political economy of Cuba’s participation in the GATT and later the World Trade Organization (WTO). Documents show that Cuba sought to use its participation to gain new markets and influence in the developing world. While Cuba has gained little economically from its participation, in recent years it has diversified its exports and trade partners, and its trade interests now align more closely with WTO rules. Economic reforms will be necessary in order for Cuba to benefit.     

A new perspective on the exporter productivity premium: online trade

We use a unique firm-level data set including 9000 companies from 26 European Union countries covering four different sectors to take a close look at the relationship between online exports and productivity. The online exporter productivity premium is estimated using different techniques (ordinary least squares, quantile regressions and robust estimation). Results consistently indicate that the estimated online exporter productivity premium is statistically different from zero, positive and significant from an economic point of view. European online exporters, according to these results, are approximately 2% more productive than non-online exporters. Productivity differences between firms could be related to variables that are not included in the empirical model. More research would be needed to address this issue in the future.     

Analysis of the Efficacy of Public Spending on Research and Development in State Programs

This paper presents an approach to assessing the efficacy of public spending on research and development in state programs. At present, there is a need to develop a unified approach to the analysis and evaluation of the efficacy of such spending from the perspective of participants in state programs (federal executive bodies). The proposed approach does not allow evaluating the efficacy of public spending on the development of research areas assigned to the authors.     

Competition and cooperation in the exploitation of the groundwater resource

We study the exploitation of a common groundwater resource, first as a static and then as a differential game, in order to take into account the strategic and dynamic interactions among the users of the resource. We suppose that firms can form coalitions or can decide not to cooperate. The non-cooperation regime is characterized by pumping that lead to depletion of the aquifer; the cooperation preserves the resource. Open-loop and feedback equilibria have been computed and compared in order to characterize the existence of cooperators and defectors in water resources management.