accounting for political opinions power and influence a voting advice application voting advice applications vaas are online decision support systems that try to match voters with political parties or candidates in elections typically based on how each responds to a number of policy issue statements such vaas play a major role in many countries in this paper we describe the development and large scale application of a new innovative matching algorithm for the most widely used vaa in finland we worked closely with the owner of the vaa the largest daily newspaper in finland helsingin sanomat their previous algorithm which one might call a naive approach was improved by including measures of candidate s political power and influence using proxy variables of media visibility and incumbency status the vaa was implemented for the 2015 parliamentary election in finland our matching algorithm was used by 140 000 voters 26 7 of the electorate in the helsinki election district the innovative algorithm generated recommendations that many voters were happy about followed by users incidental comments that this was the first time the vaa recommended candidates they wanted to vote for this showed the importance of catering to different kinds of voters with a model not previously considered by any vaa in any country

the impact of different incentive schemes on asset prices abstract how people are incentivized is one of the main drivers of how they behave in laboratory asset markets we evaluate the impact of four trader incentive bonus bonus with cap linear and penalty on asset prices and trader behavior we find that i an asset with identical expected dividend shows price levels which differ by more than 100 percent depending on the incentive scheme subjects face in particular prices of markets populated by subjects with bonus incentives show the highest prices whereas those with penalty like incentivized subjects exhibit the lowest ii however subjects act approximately rational as different incentives generate different optimal price levels iii in markets where different subjects have different incentive schemes we find that those with bonus incentives exhibit a riskier investment behavior and prefer the riskier asset whereas subjects with penalty incentives invest conservatively and mainly hold cash since we find no difference in risk attitude of subjects prior to the experiment differences in investment behavior are induced by the applied incentives our results highlight that incentives on financial markets have a huge impact on asset prices and investment behavior

thar she bursts reducing confusion reduces bubbles to explore why bubbles frequently emerge in the experimental asset market model of smith suchanek and williams 1988 we vary the fundamental value process constant or declining and the cash to asset value ratio constant or increasing we observe high mispricing in treatments with a declining fundamental value while overvaluation emerges when coupled with an increasing c a ratio a questionnaire reveals that the declining fundamental value process confuses subjects as they expect the fundamental value to stay constant running the experiment with a different context stocks of a depletable gold mine instead of stocks significantly reduces mispricing and overvaluation as it reduces confusion jel c91 d14 g11 g12

technological innovation and real investment booms and busts abstract we investigate why new high risk technologies can attract excessive and often unprofitable investment we develop an equilibrium model in which rational risk averse agents overinvest in a risky technology possibly to the point that its expected return is negative overinvestment results from relative wealth concerns which arise endogenously from the imperfect tradability of future endowments competition over future consumption leads to an indirect utility for wealth with keeping up with the joneses properties that can induce herding because overinvestment increases with the risk of the technology our model can explain why new risky technological innovations may promote investment bubbles

the variable choice set logit model applied to the 2004 canadian election formal work on the electoral model often suggests that parties should locate at the electoral mean recent research has found no evidence of such convergence in order to explain non convergence the stochastic electoral model is extended by including a competence and sociodemographic valance in a country where regional and national parties compete in the election that is the model allows voters to face different sets of parties in different regions we introduce the notion of a convergence coefficient c for regional and national parties and show that when c is high there is a significant centrifugal tendency acting on parties an electoral survey of the 2004 election in canada is used to construct a stochastic electoral model of the election with two regions quebec and the rest of canada the survey allows us to estimate voter positions in the policy space the variable choice set logit model is used to built a relationship between party position and vote share we find that in the local nash equilibrium for the election the two main parties with high competence valence the liberals and conservatives locate at the national electoral mean and the bloc quebecois with the highest competence valence locates at the quebec electoral mean the new democratic party has a low competence valence but remains at the national mean the greens with lowest competence valence locate away from the national mean to increase its vote share

rank matters the impact of social competition on portfolio choice tournament incentives schemes have been criticized for inducing excessive risk taking among financial market participants in this paper we investigate how relative performance based incentive schemes and status concerns for higher rank influence portfolio choice in laboratory experiments we find that both underperformers and over performers adapt their portfolios to their current relative performance preferring either positively or negatively skewed assets respectively most importantly these results hold both when relative performance is instrumental for higher payoffs in a tournament and when it is only intrinsically motivating and not payout relevant we find no effects when no relative performance information is given

bubbles crashes and endogenous expectations in experimental spot asset markets1 spot asset trading is studied in an environment in which all investors receive the same dividend from a known probability distribution at the end of each of t 15 or 30 trading periods fourteen of twenty two experiments exhibit price bubbles followed by crashes relative to intrinsic dividend value when traders are experienced this reduces but does not eliminate the probability of a bubble the regression of changes in mean price on lagged excess bids number of bids minus the number of offers in the previous period p pt a f b 1 o l supports the hypothesis that a e d the one period expected value of the dividend and that f 0 where excess bids is a surrogate measure of excess demand arising from homegrown capital gains losses expectations thus when bt 1 o goes to zero we have convergence to rational expectations in the sense of fama 1970 that arbitrage becomes unprofitable the observed bubble phenomenon can also be interpreted as a form of temporary myopia tirole 1982 from which agents learn that capital gains expectations are only temporarily sustainable ultimately inducing common expectations or priors tirole 1982 four of twenty six experiments all using experienced subjects yield outcomes that appear to the chart s eye to converge early to rational expectations although even in these cases we get 0 and small price fluctuations of a few cents that invite scalping

relative wealth concerns and financial bubbles we present a rational general equilibrium model that highlights the fact that relative wealth concerns can play a role in explaining financial bubbles we consider a finite horizon overlapping generations model in which agents care only about their consumption though the horizon is finite competition over future investment opportunities makes agents utilities dependent on the wealth of their cohort and induces relative wealth concerns agents herd into risky securities and drive down their expected return even though the bubble is likely to burst and lead to a substantial loss agents relative wealth concerns make them afraid to trade against the crowd

social and spatial networks in labour markets social connections and referrals are ubiquitous in the labour market both on the job seeker side and on the employer side this article reviews recent developments in the study of referrals highlighting what we have learned regarding the use and impact of referrals on various labour market outcomes and pointing out the increasingly nuanced picture we are gaining on the effects of referrals it then discusses directions for future research emphasizing the importance of using newly available data and combinations of datasets and of making tighter connections with the burgeoning macro labour research that is based on a search and matching framework finally it evaluates the role of referrals from the point of view of policy makers discussing their social welfare implications and ways in which they could be explicitly incorporated into various labour market policies the importance of tighter collaboration between policy makers researchers employers and practitioners is stressed to conduct more rigorous experimentation and evaluation of potential referral based policies and programmes

market microstructure matters when imposing a tobin tax evidence from the lab trading in fx markets is dominated by two microstructures exchanges with market makers and otc markets without market makers using laboratory experiments we test whether the impact of a tobin tax is different in these two market microstructures we find that i in markets without market makers an unilaterally imposed tobin tax i e a tax haven exists increases volatility ii in contrast in markets with market makers we observe a decrease in volatility in unilaterally taxed markets iii an encompassing tobin tax has no impact on volatility in either setting efficiency does not vary significantly across tax regimes

modifying variability and correlations in winner take all contests we consider contests with a fixed proportion of winners based on relative performance special attention is paid to winner take all contests which we define as contests with relatively few winners receiving relatively large awards but we consider the full range of values of the proportion of winners if a contestant has the opportunity to modify the distribution of her performance what strategy is advantageous when the proportion of winners is less than one half a riskier performance distribution is preferred when this proportion is greater than one half it is better to choose a less risky distribution using a multinormal model we consider modifications in the variability of the distribution and in correlations with the performance of other contestants increasing variability and decreasing correlations lead to improved chances of winning when the proportion of winners is less than one half and the opposite directions should be taken for proportions greater than one half thus it is better to take chances and to attempt to distance oneself from the other contestants i e to break away from the herd when there are few winners a more conservative herding strategy makes sense when there are many winners our analytical and numerical results indicate that the probability of winning can change substantially as variability and or correlations are modified furthermore in a game theoretic setting in which all contestants can make modifications choosing a riskier less risky performance distribution when the proportion of winners is low high is the dominant best response strategy we briefly consider some practical issues related to the recommended strategies and some possible extensions

uninformed votes information effects in presidential elections theory recent scholarship has emphasized the potential importance of cues information shortcuts and statistical aggregation processes in allowing relatively uninformed citizens to act individually or collectively as if they were fully informed hypotheses uninformed voters successfully use cues and information shortcuts to behave as if they were fully informed failing that individual deviations from fully informed voting cancel out in a mass electorate producing the same aggregate election outcome as if voters were fully informed methods hypothetical fully informed vote choices are imputed to individual voters using the observed relationship between political information and vote choices for voters with similar social and demographic characteristics estimated by probit analysis of data from national election study surveys conducted after the six most recent united states presidential elections results both hypotheses are clearly disconfirmed at the individual level the average deviation of actual vote probabilities from hypothetical fully informed vote probabilities was about ten percentage points in the electorate as a whole these deviations were significantly diluted by aggregation but by no means eliminated incumbent presidents did almost five percentage points better and democratic candidates did almost two percentage points better than they would have if voters had in fact been fully informed

social networks and inequality abstract about half of all vacancies are filled through networks of personal contact we consider the arrow loury conjecture that such labor market networks exacerbate inequality our central result is that referral networks display threshold behavior above a critical density of referrals qualified workers at all levels of the network are recruited with probability one below the threshold the probability of referral falls exponentially and workers low in the hierarchy are hired with probability zero an underclass emerges

costly search and mutual fund flows this paper studies the flows of funds into and out of equity mutual funds consumers base their fund purchase decisions on prior performance information but do so asymmetrically investing disproportionately more in funds that performed very well the prior period search costs seem to be an important determinant of fund flows high performance appears to be most salient for funds that exert higher marketing effort as measured by higher fees flows are directly related to the size of the fund s complex as well as the current media attention received by the fund which lower consumers search costs

the informal recruitment channel and the quality of job worker matches an analysis on italian survey data this article analyzes the consequences of being recruited through the informal channel in the italian labor market using data collected through a new survey implemented by institute for the development of the vocational training of workers isfol we find that while workers entering the labor market via professional ties enjoy a wage bonus and a reduction in entry times those recruited via family and friends referrals save on entry times but receive on average lower wages moreover the use of the family channel reduces the returns to education and is associated with the phenomenon of over education suggesting the existence of some mismatches between workers and jobs characteristics copyright 2011 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

employer recruitment strategies and the labor market outcomes of new hires i introduction employers and job seekers are brought together for potential matches through their recruitment and job search activities employers may post help wanted signs run newspaper advertisements or seek referrals from private employment agencies job seekers may speak with friends and relatives solicit the aid of the state employment agency or simply walk in and apply these recruitment and search activities help both parties acquire information about each other and the more information they obtain prior to entering an employment agreement the higher the likelihood of a good employment match the crucial role of information in the labor market has been recognized since stigler 1962 but despite a voluminous literature on job matching and organizational behavior in labor markets we know far less about employers recruitment strategies than about job seekers search strategies as granovetter 1995 notes while people are finding jobs employers are finding people to fill them and their behaviors strategies and purposes play a central but often neglected role in the process of matching people to jobs this imbalance in research effort is explained more by a dearth of adequate data describing employer recruitment behavior than by lack of scholarly interest indeed labor economists sociologists psychologists and human resource management specialists have spent the last half century exploiting the meager existing data sets in efforts to learn about employer recruitment behavior in this article i address several empirical questions concerning employer recruitment using the multi city study of urban inequality mcsui a large cross sectional survey of employers in four metropolitan areas of the united states that has not been exploited for a detailed analysis of the relationships among recruitment strategies starting wages and vacancy duration despite the richness of the data set for this purpose the mcsui data contain detailed information on firm and job characteristics and most important for the purpose of this article indicators of the recruitment methods these employers used when hiring the most recently hired worker the data allow a number of interesting questions to be addressed concerning the link between employer recruitment choices and starting wages vacancy duration and the skill levels of new hires because there has been relatively little empirical research done by labor economists on employer recruitment this work with a relatively large representative sample of employers should enhance our understanding of a number of basic questions i consider three of these first i present evidence describing which recruitment methods employers use and how these vary by firm characteristics vacancy characteristics and the skill requirements of jobs i estimate a multivariate probit model with a separate equation for each of 10 recruitment choices in addition to providing information about the relationship of each recruitment method with each of the covariates this method has the attractive feature of allowing for an analysis of the relationships among the unobserved determinants of recruitment choice to my knowledge this methodology is new to the recruitment literature second i present regression evidence showing how vacancy duration varies by recruitment choices some recruitment methods can be expected to be faster than others in generating job applicants however an employer must invest time in screening the applicant pool so the recruitment methods that generate applicants quickly do not necessarily fill vacancies quickly therefore the link between recruitment methods and vacancy durations is an empirical question third i present evidence concerning the relationship between starting wages and recruitment methods in particular i augment standard log wage specifications based on the human capital model with recruitment choices and find that the recruitment variables have explanatory power even in the presence of all of the usual controls

household entrepreneurship and social networks panel data evidence from vietnam en utilisant un panel de microentreprises familiales au vietnam cet article met en relation le reseau social des entrepreneurs et de leur menage avec la performance de la microentreprise familiale nous abordons deux questions connexes la premiere examine la possibilite d effets differencies de l emploi des membres de la famille par rapport a des travailleurs recrutes sur le marche du travail sur la performance de la microentreprise une deuxieme question aborde les effets respectifs des differentes dimensions des reseaux sociaux sur l efficience technique de la microentreprise l hypothese testee est que au dela du canal de la productivite du travail les entrepreneurs qui sont confrontes a un environnement social defavorable pourraient produire moins efficacement et realiser une valeur ajoutee plus faible que ce qui pourrait etre possible avec la meme quantite de ressources nous montrons qu il existe en effet un differentiel de productivite entre le travail familial et le travail recrute sur le marche et nos resultats attestent de la presence d effets defavorables du reseau social pour certains menages gerant une microentreprise nous soulignons aussi l importance des reseaux professionnels pour la reussite de l entreprenariat familial

the impact of informal networks on quit behavior sector disaggregation the change in the level effect accounts for only 0 35 0 41 percentage point of the 2 24 percentage point deceleration in labor productivity growth between the 1948 65 and 1973 78 periods the aggregate rate and level effects are not very sensitive to the degree of disaggregation 12versus 60 sector although some large level effects are evident within and across major industrial divisions they often cancel out in the aggregate however the level effect from the shift out of farming is quantitatively large and is close to the aggregate level effect using either 12 sector or 60 sector disaggregation although one can approximate the aggregate level effect by looking only at that for agriculture one should note that other fairly large level effects exist both within and across major industrial divisions other than agriculture

the inflow effect trader inflow and price efficiency abstract we investigate the impact of cash and trader inflow on price efficiency in multi period experimental asset markets implementing eight treatments with 672 subjects we find that i the joint inflow of cash and traders triggers strong overvaluation and massive price run ups inflow effect remarkably the effect occurs in almost all of the 30 markets with joint cash and trader inflow and is very robust the effect even prevails in markets with complete and symmetric fundamental information we further show that ii in treatments with the joint inflow of cash and traders prices crash to fundamentals towards maturity of the asset the analysis of traders beliefs reveals that iii despite fundamental values staying constant beliefs about fundamentals co move with upwardly trending prices finally we report a speculative motive only among the optimists in treatments where we observe the inflow effect

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

do friends and relatives really help in getting a good job informal contacts are extensively used by both firms and workers to find jobs and fill vacancies the common wisdom in the economic literature is that jobs created through this channel are of better quality and pay higher wages than jobs created through formal methods this paper explores the empirical evidence for european countries using the european community household panel echp and discovers a large cross country as well as cross industry variation in the wage differentials between jobs found through informal and formal methods across countries and industries wage premiums and wage penalties to finding jobs through personal contacts are equally frequent this paper argues that such variation can be explained by looking at firms recruitment strategies in labour markets where employers invest largely in formal recruitment activities matches created through this channel are likely to be of average better quality than those created through informal networks a simple theoretical model is used to show that employers invest more in recruitment for high productivity jobs and for positions that require considerable training the empirical predictions of the theory are successfully tested using industry level data on recruitment costs

boundaries of the tournament pricing effect in asset markets evidence from experimental markets 1 introduction when traders in experimental asset markets are compensated according to a tournament contract a salary plus bonus scheme in which a trader s bonus is proportional to the amount by which that trader exceeds the average performance in that market we observe violation of convergence results obtained in experiments that did not use such compensation schemes this effect of tournament incentives has been documented by james and isaac 2000 in this paper we search for what smith and williams 1990 have termed the boundaries of falsification for the proposition that tournament contracts affect asset market prices specifically we examine the robustness of the tournament pricing effect on market prices on several fronts first we ask whether the pricing effect survives when not all traders are being compensated according to the beat the market contract second we ask whether the tournament pricing effect is robust with respect to perturbations in the trader s compensation contract third we ask whether the pricing effect is observed in two period asset life markets hereafter 2 p a l markets as it is in 15 period asset life markets hereafter 15 p a l markets 1 section 2 presents the background of the current experiments the research conjectures and the experimental design the experimental results are contained in section 3 section 4 discusses a phenomenon that we had not encountered until these experiments section 5 offers the conclusions and thoughts for further reflection 2 conjectures and experimental design background james and isaac 2000 was the first paper to assess the effect on asset market prices of tournament contracts imposed at the individual level this is distinct from an earlier paper by brown harlow and starks 1996 that examines how individual portfolio managers allocation decisions change in response to such contracts but that does not address the issue of any effects on prices of the assets the portfolio managers are trading brown harlow and starks is itself a specific application of a wider literature on using tournament contracts to address principal agent conflicts see also nalebuff and stiglitz 1983 bull schotter and weigelt 1987 and ehrenburg and bognanno 1990 the issue of the effect on market prices is arguably the most important one surrounding the imposition of tournament contracts on portfolio managers because it is these capital market prices that help allocate savings to different forms of investment naturally misleading capital market prices can potentially lead to catastrophically misdirected capital spending 2 this key aspect of james and isaac that it addresses the effect at the market level of using tournament incentives at the individual level is also present in this paper the research objective of this paper is to document the eventual market level ramifications of varying the use of tournament contracts the nature of those variations will be discussed here the effect of tournament incentives on asset market prices prior to this paper it has been established that the way in which traders in experimental asset markets are compensated on an individual basis can significantly change the prices that eventuate at the market level in a seminal paper on experimental asset markets smith suchanek and williams 1988 hereafter ssw find that as groups of traders were called back for repeat sessions of a 15 p a l market which can be viewed as an experimental implementation of the theoretical market analyzed by tirole 1982 the market price of the asset bubbled less in each successive 15 period asset market this suggests that the no trading common expectations equilibrium derived by tirole might be reached eventually but requires experience on the part of the pool of traders of note in ssw the traders are compensated such that an experimental dollar corresponds to a u s dollar that is the traders respective experimental dollar holdings deriving variously from cash endowments dividend payments and capital gains are translated one for one into u

difference in interim performance and risk taking with short sale constraints abstract absent much theory empirical works often rely on the following informal reasoning when looking for evidence of a mutual fund tournament if there is a tournament interim winners have incentives to decrease their portfolio volatility as they attempt to protect their lead while interim losers are expected to increase their volatility so as to catch up with winners we consider a rational model of a mutual fund tournament in the presence of short sale constraints and find the opposite interim winners choose more volatile portfolios in equilibrium than interim losers several empirical works present evidence consistent with our model however based on the above informal argument they appear to conclude against the tournament behavior we argue that this conclusion is unwarranted we also demonstrate that tournament incentives lead to differences in interim performance for otherwise identical managers and that mid year trading volume is inversely related to mid year stock return

myopic risk taking in tournaments abstract there is a common notion that incentive schemes in the financial industry trigger myopia and risk taking in some sense this contrasts with the concept of myopic loss aversion mla which implies that myopia mitigates risk taking a number of experimental studies support the mla hypothesis by showing that people take less risk the more frequently their investments are evaluated in this paper we show experimentally that if subjects are exposed to tournament incentives the standard mla effect disappears rather there is a tendency towards more risk taking the more frequently investments are evaluated

quits and race previous studies estimate that black quit rates are lower than those of whites this paper suggests that these estimates under state black quit propensities because they neglect racial differences in quit responses to commuting time and local unemployment rates ignoring these differences the black quit effect appears to be negative controlling for them the residual race effect is positive and sufficiently large to account for all net black quits

hroot hamburg registration and organization online tool abstract hroot hamburg registration and organization online tool is a web based software designed for managing participants of economic experiments this package provides important features to assure a randomized invitation process based on a filtered pre specified subject pool and a complete documentation of the selection procedure for potential participants of an experiment

risk taking behavior in mutual fund tournaments abstract we develop a two period model of a brown et al j finance 51 1996 85 mutual fund tournament in which two fund managers with unequal midyear performances compete for new cash inflows when one of the managers is an exogenous benchmark winning managers index and losing managers gamble however when both managers are active the winning manager is more likely to gamble expecially when the midyear performance gap is high or when stocks offer high returns and low volatility empirical evidence that winning managers gamble has been documented by other researchers but it has been interpreted as evidence against the tournament model with a dataset of weekly returns from 1984 to 1996 for 660 mutual funds we text for other tournament effects predicted by the model our results suggest a role for the theory of tournaments in studies of mutual fund behavior

career concerns of mutual fund managers we examine the labor market for mutual fund managers using data from 1992 1994 we find that termination is more performance sensitive for younger managers we identify possible implicit incentives created by the termination performance relationship the shape of the termination performance relationship may give younger managers an incentive to avoid unsystematic risk direct effects of portfolio composition may also give younger managers an incentive to herd into popular sectors consistent with these incentives we find that younger managers hold less unsystematic risk and have more conventional portfolios promotion incentives and market responses to managerial turnover are also studied

entrepreneurial women and men two different species the ability of the self employed to create additional job opportunities is a fundamental concern given the huge increases in public resources targeted at new venture creation in the u k and other countries since 1979 this study initially concentrates on identifying differences in the personal and demographic characteristics of women and men in four potential labour market states namely unemployment waged employment single self employment and job creating self employment it then goes on to consider labour market transitions over a four year period between 1991 and 1995 the key findings are firstly that women entrepreneurs are better educated than their male counterparts and secondly that flows into self employment were considerably higher for men than women furthermore proportionately three times as many male self employed in 1991 had gone on to become job creating self employed by 1995

a dynamic model of job networking and social influences on employment abstract this paper explores an economy in which personal connections facilitate job search in the model a firm receives information on the productivity of those job applicants with social ties to its current employees in addition to providing a theory of networking the model endogenously generates two classic theories in economic sociology first there is a highly non linear relationship between average human capital in a group of socially connected individuals and the group s employment rate small changes in group composition may cause large changes in employment as suggested in wilson s social isolation explanation for high unemployment rates among poor african americans the model also supports granovetter s strength of weak ties hypothesis which holds that acquaintances are more valuable job contacts than close friends

how tournament incentives affect asset markets a comparison between winner take all tournaments and elimination contests abstract we investigate the impact of investment managers tournament incentives on investment strategies and market efficiency distinguishing between winner take all tournaments wta where a minority wins and elimination contests ec where a majority wins theoretically we show that investment managers play heterogeneous strategies in wta and homogeneous strategies in ec and markets are more prone to mispricing in wta than in ec experimentally we find that investment managers play more heterogeneous strategies in wta than in ec but this does not trigger significant differences in prices moreover prices in wta and ec do not differ significantly from markets composed of linearly incentivized subjects

do option like incentives induce overvaluation evidence from experimental asset markets abstract one potential reason for bubbles evolving prior to the financial crisis was excessive risk taking stemming from option like incentive schemes in financial institutions by running laboratory asset markets we investigate the impact of option like incentives on price formation and trading behavior the main results are that i we observe significantly higher market prices with option like incentives than linear incentives ii we further find that option like incentives provoke subjects to behave differently and to take more risk than subjects with linear incentives iii we finally show that trading at inflated prices is rational for subjects with option like incentives since it increases their expected payout

tournament rewards and risk taking this article considers a lazear rosen tournament model where agents can influence both the spread of their output distribution risk taking and its mean the unique equilibrium induces excessive risk taking and a low level of effort by modifying the tournament to give the highest prize to the agent with the most moderate output a low level of risk taking and high level of effort can be sustained as an equilibrium the first result can be useful to understand the relative performance evaluation puzzle of executive compensation and the second result can be useful to understand puzzling workplace norms promoting mediocrity

o papel das redes sociais na condicao do desempregado uma analise usando a teoria de matching the paper investigates whether the size of social networks can aect the unemployment rate of the economy therefore based on a theoretical model of matching i propose a technique for simulating the eects of networks on the employability of workers the proposal is applied to a database of portugal noting evidence that there is an optimal size of network that minimizes the unemployment rate

search method use by unemployed youth this article presents a search model which shows that search method choices should be related to their costs and expected productivities as well as to nonwage income and wage offer distributions the empirical evidence then shows that the most frequently used search methods i e friends and relatives and direct applications without referral are also the most productive in generating offers and acceptances the number of methods used is affected by factors that presumably reflect opportunities as well as income sources and needs specific methods are chosen in a manner that generates positive average effects on outcomes for those using them

risk taking in selection contests abstract we study contests where the strategic variable is the degree of risk taking rather than the amount of effort the selection efficiency of such contests is examined we show that the selection efficiency of a contest may be improved by limiting the competition in two ways by having a small number of contestants and by restricting contestant quality

is financial instability male driven gender and cognitive skills in experimental asset markets abstract the hypothesis that price stability would reliably increase with the fraction of women operating in financial markets has been frequently suggested in policy discussions to test this hypothesis we conducted 10 male only 10 female only and 10 mixed gender experimental asset markets and compared the effects of gender composition confidence risk attitude and cognitive skills male and female markets have comparable volatility and deviations from fundamentals whereas mixed gender markets are substantially more stable on the other hand higher average cognitive skills of the group are associated with reduced market volatility individual level analysis shows that subjects with higher cognitive skills trade at prices closer to fundamental values and earn significantly higher profits similarly mixed markets exhibit lower mispricing particularly for traders with lower cognitive skills our results are demonstrated to hold in other experimental asset market studies suggesting that a mixed gender composition reduces mispricing across different types of asset markets

the delegated lucas tree we analyze the effects of the observed increased share of delegated capital for trading strategies and equilibrium prices by introducing delegation into a standard lucas exchange economy in equilibrium some investors trade on their own account but others decide to delegate trading to professional fund managers flow performance incentive functions describe how much capital clients provide to funds at each date as a function of past performance convex flow performance relations imply that the average fund outperforms the market in recessions and underperforms in expansions when the share of capital that is delegated is low all funds follow the same strategy however when the equilibrium share of delegated capital is high funds with identical incentives employ heterogeneous trading strategies a group of managers borrows to take on a levered position on the stock thus fund returns are dispersed in the cross section and the outstanding amounts of borrowing and lending increase the relation between the share of delegated capital and the sharpe ratio typically follows an inverse u shaped pattern jel g11 g12 g23 d02 d81 over the past thirty years there has been a gradual but profound change in the way money is invested in financial markets while almost 50 of u s equities were held directly in 1980 by 2007 this proportion decreased to approximately 20 see french 2008 what are the equilibrium implications of this shift in particular how does the increased presence of delegation affect trading strategies and prices to analyze the link between the incentives of financial institutions and asset prices we introduce financial intermediaries into a lucas exchange economy rather than study an optimal contracting problem we rely on empirical regularities inflows and assume a convex relation betweenflows and performance relative to the market as documented for example in chevalier and ellison 1997

racial differences in residential and job mobility evidence concerning the spatial mismatch hypothesis abstract the spatial mismatch hypothesis asserts that job decentralization adversely impacts the labor market outcomes of african americans this paper tests whether race and job access have an independent effect on the probability of a joint residential move and job change no evidence is found to indicate that race directly influences the joint probability the paper finds however that poor job access has an independent negative effect on the probability of a joint residential move and job change because african american residences are heavily concentrated in american central cities these results suggest that african american workers may not be able to fully adjust as new jobs are created in the suburbs

judge don t vote this article explains why 1 the traditional model of the theory of social choice misrepresents reality 2 it cannot lead to acceptable methods of ranking and electing in any case and 3 a more realistic model leads inevitably to one method of ranking and electing majority judgment that best meets the traditional criteria of what constitutes a good method

some contacts are more equal than others informal networks job tenure and wages the explanation typically given for longer tenure among workers who use informal contacts to find jobs is that relatives and friends reduce uncertainty about the quality of the match between worker and employer an alternative explanation is that workers rely on informal information sources as a last resort such workers remain at their current jobs mainly because they have few alternative choices rather than because of better match quality this article shows that the two different explanations are simultaneously valid for different types of contacts and can account for differences in the wage effects of job contacts