pwc-archive/papers-with-abstracts huggingface dataset:
Pricing Energy Storage in Real-time Market
Authors: Cong Chen, Lang Tong, Ye Guo
Date: 2021-01-25 00:00:00

The problem of pricing utility-scale energy storage resources (ESRs) in the real-time electricity market is considered. Under a rolling-window dispatch model where the operator centrally dispatches generation and consumption under forecasting uncertainty, it is shown that almost all uniform pricing schemes, including the standard locational marginal pricing (LMP), result in lost opportunity costs that require out-of-the-market settlements. It is also shown that such settlements give rise to disincentives for generating firms and storage participants to bid truthfully, even when these market participants are rational price-takers in a competitive market. Temporal locational marginal pricing (TLMP) is proposed for ESRs as a generalization of LMP to an in-market discriminative form. TLMP is a sum of the system-wide energy price, LMP, and the individual state-of-charge price. It is shown that, under arbitrary forecasting errors, the rolling-window implementation of TLMP eliminates the lost opportunity costs and provides incentives to price-taking firms to bid truthfully with their marginal costs. Numerical examples show insights into the effects of uniform and non-uniform pricing mechanisms on dispatch following and truthful bidding incentives.
How does COVID-19 change insurance and vaccine demand? Evidence from short-panel data in Japan
Authors: Eiji Yamamura, Yoshiro Tsutsui
Date: 2021-01-22 00:00:00

In this study, we explored how the coronavirus disease (COVID-19) affected the demand for insurance and vaccines in Japan from mid-March to mid-April 2020. Through independent internet surveys, respondents were asked hypothetical questions concerning the demand for insurance and vaccines for protection against COVID-19. Using the collected short-panel data, after controlling for individual characteristics using the fixed effects model, the key findings, within the context of the pandemic, were as follows: (1) Contrary to extant studies, the demand for insurance by females was smaller than that by their male counterparts; (2) The gap in demand for insurance between genders increased as the pandemic prevailed; (3) The demand for a vaccine by females was higher than that for males; and (4) As COVID-19 spread throughout Japan, demand for insurance decreased, whereas the demand for a vaccine increased.
Investors Embrace Gender Diversity, Not Female CEOs: The Role of Gender in Startup Fundraising
Authors: Christopher Cassion, Yuhang Qian, Constant Bossou, Margareta Ackerman
Date: 2021-01-21 00:00:00
Tasks: Diversity

The allocation of venture capital is one of the primary factors determining who takes products to market, which startups succeed or fail, and as such who gets to participate in the shaping of our collective economy. While gender diversity contributes to startup success, most funding is allocated to male-only entrepreneurial teams. In the wake of COVID-19, 2020 is seeing a notable decline in funding to female and mixed-gender teams, giving raise to an urgent need to study and correct the longstanding gender bias in startup funding allocation. We conduct an in-depth data analysis of over 48,000 companies on Crunchbase, comparing funding allocation based on the gender composition of founding teams. Detailed findings across diverse industries and geographies are presented. Further, we construct machine learning models to predict whether startups will reach an equity round, revealing the surprising finding that the CEO's gender is the primary determining factor for attaining funding. Policy implications for this pressing issue are discussed.
Willingness to Pay and Attitudinal Preferences of Indian Consumers for Electric Vehicles
Authors: Prateek Bansal, Rajeev Ranjan Kumar, Alok Raj, Subodh Dubey, Daniel J. Graham
Date: 2021-01-20 00:00:00
Tasks: Marketing

Consumer preference elicitation is critical to devise effective policies for the diffusion of electric vehicles (EVs) in India. This study contributes to the EV demand literature in the Indian context by (a) analysing the EV attributes and attitudinal factors of Indian car buyers that determine consumers' preferences for EVs, (b) estimating Indian consumers' willingness to pay (WTP) to buy EVs with improved attributes, and c) quantifying how the reference dependence affects the WTP estimates. We adopt a hybrid choice modelling approach for the above analysis. The results indicate that accounting for reference dependence provides more realistic WTP estimates than the standard utility estimation approach. Our results suggest that Indian consumers are willing to pay an additional USD 10-34 in the purchase price to reduce the fast charging time by 1 minute, USD 7-40 to add a kilometre to the driving range of EVs at 200 kilometres, and USD 104-692 to save USD 1 per 100 kilometres in operating cost. These estimates and the effect of attitudes on the likelihood to adopt EVs provide insights about EV design, marketing strategies, and pro-EV policies (e.g., specialised lanes and reserved parking for EVs) to expedite the adoption of EVs in India.
Simultaneous supply and demand constraints in input-output networks: The case of Covid-19 in Germany, Italy, and Spain
Authors: Anton Pichler, J. Doyne Farmer
Date: 2021-01-19 00:00:00

Natural and anthropogenic disasters frequently affect both the supply and demand side of an economy. A striking recent example is the Covid-19 pandemic which has created severe disruptions to economic output in most countries. These direct shocks to supply and demand will propagate downstream and upstream through production networks. Given the exogenous shocks, we derive a lower bound on total shock propagation. We find that even in this best case scenario network effects substantially amplify the initial shocks. To obtain more realistic model predictions, we study the propagation of shocks bottom-up by imposing different rationing rules on industries if they are not able to satisfy incoming demand. Our results show that economic impacts depend strongly on the emergence of input bottlenecks, making the rationing assumption a key variable in predicting adverse economic impacts. We further establish that the magnitude of initial shocks and network density heavily influence model predictions.
Gender Differences in Motivated Reasoning
Authors: Michael Thaler
Date: 2020-12-02 00:00:00

Men and women systematically differ in their beliefs about their performance relative to others; in particular, men tend to be more overconfident. This paper provides support for one explanation for gender differences in overconfidence, performance-motivated reasoning, in which people distort how they process new information in ways that make them believe they outperformed others. Using a large online experiment, I find that male subjects distort information processing in ways that favor their performance, while female subjects do not systematically distort information processing in either direction. These statistically-significant gender differences in performance-motivated reasoning mimic gender differences in overconfidence; beliefs of male subjects are systematically overconfident, while beliefs of female subjects are well-calibrated on average. The experiment also includes political questions, and finds that politically-motivated reasoning is similar for both men and women. These results suggest that, while men and women are both susceptible to motivated reasoning in general, men find it particularly attractive to believe that they outperformed others.
Towards a more sustainable academic publishing system
Authors: Mohsen Kayal, Jane Ballard, Ehsan Kayal
Date: 2021-01-18 00:00:00

Communicating new scientific discoveries is key to human progress. Yet, this endeavor is hindered by monetary restrictions for publishing one's findings and accessing other scientists' reports. This process is further exacerbated by a large portion of publishing media owned by private, for-profit companies that do not reinject academic publishing benefits into the scientific community, in contrast with journals from scientific societies. As the academic world is not exempt from economic crises, new alternatives are necessary to support a fair publishing system for society. After summarizing the general issues of academic publishing today, we present several solutions at the levels of the individual scientist, the scientific community, and the publisher towards more sustainable scientific publishing. By providing a voice to the many scientists who are fundamental protagonists, yet often powerless witnesses, of the academic publishing system, and a roadmap for implementing solutions, this initiative can spark increased awareness and promote shifts towards impactful practices.
Is the Capability approach a useful tool for decision aiding in public policy making?
Authors: Nicolas Fayard, Chabane Mazri, Alexis Tsoukiàs
Date: 2021-01-17 00:00:00
Tasks: Diversity, Philosophy

This paper aims at proposing a model representing individuals' welfare using Sen's capability approach (CA). It is the first step of an attempt to measure the negative impact caused by the damage at a Common on a given population's welfare, and widely speaking, a first step into modelling collective threat. The CA is a multidimensional representation of persons' well-beings which account for human diversity. It has received substantial attention from scholars from different disciplines such as philosophy, economics and social scientist. Nevertheless, there is no empirical work that really fits the theoretical framework. Our goal is to show that the capability approach can be very useful for decision aiding, especially if we fill the gap between the theory and the empirical work; thus we will propose a framework that is both usable and a close representation of what capability is.
The Impact of Digital Marketing on Sausage Manufacturing Companies in the Altos of Jalisco
Authors: Guillermo Jose Navarro del Toro
Date: 2021-01-17 00:00:00
Tasks: Marketing

One of the goals of any business, in addition to producing high-quality, community-accepted products, is to significantly increase sales. Unfortunately, there are regions where new marketing technologies that make it possible to reach a larger number of potential consumers, not only at the regional level, but also at the state and national level, are not yet used. This research, which included qualitative and quantitative methods, as well as interviews applied to owners, employees and clients of three sausage companies, seeks to measure the impact of digital marketing in the Altos of Jalisco, Mexico. Thus, in addition to inquiring about the degree of knowledge they have regarding information and communication technologies (ICT) to expand their markets to areas with higher population density, another goal is to know the opinion about their manufactured products, their quality and acceptance. It should not be forgotten that companies are moving to an increasingly connected world, which enables entrepreneurs to get their products to a greater number of consumers through the Internet and smart devices, such as cell phones, tablets and computers; and thus ensure the survival of the company and a longer stay in the market.
Diagnosis of systemic risk and contagion across financial sectors
Authors: Sayuj Choudhari, Richard Licheng Zhu
Date: 2021-01-17 00:00:00
Tasks: Time Series, Time Series Analysis

In normal times, it is assumed that financial institutions operating in non-overlapping sectors have complementary and distinct outcomes, typically reflected in mostly uncorrelated outcomes and asset returns. Such is the reasoning behind common "free lunches" to be had in investing, like diversifying assets across equity and bond sectors. Unfortunately, the recurrence of crises like the Great Financial Crisis of 2007-2008 demonstrate that such convenient assumptions often break down, with dramatic consequences for all financial actors. In hindsight, the emergence of systemic risk (as exemplified by failure in one part of a system spreading to ostensibly unrelated parts of the system) has been explained by narratives such as deregulation and leverage. But can we diagnose and quantify the ongoing emergence of systemic risk in financial systems? In this study, we focus on two previously-documented measures of systemic risk that require only easily available time series data (eg monthly asset returns): cross-correlation and principal component analysis. We apply these tests to daily and monthly returns on hedge fund indexes and broad-based market indexes, and discuss their results. We hope that a frank discussion of these simple, non-parametric measures can help inform legislators, lawmakers, and financial actors of potential crises looming on the horizon.
Moving Away from the Joneses to Move Ahead: Migration, Information Gap and Signalling
Authors: Shihas Abdul-Razak, Upasak Das, Rupayan Pal
Date: 2021-01-15 00:00:00

Signalling social status through the consumption of visible goods has often been perceived as a way in which individuals seek to emulate or move up compared to others within the community. Using representative migration survey data from the Indian state of Kerala, this paper assesses the impact of transnational migration on consumption of visible goods. We utilize the plausibly exogenous variation in migration networks in the neighbourhood and religious communities to account for the potential endogeneity. The findings indicate a significantly positive and robust effect of migration on conspicuous consumption, even after controlling for household income. In terms of the mechanisms, while we are unable to rule out the associated taste-based changes in preferences and the peer group effects driving up the spending on status goods, we observe only limited effects of these channels. A potential channel that we propose is information gap among permanent residents about the income levels of an out-migrant, which is leveraged by them to signal higher status in society. We explore this channel through a theoretical model where we connect migration, information gap and status good consumption. We derive a set of conditions to test whether migrants exhibit snobbish or conformist behaviour. Empirical observations indicate predominance of a snobbish behaviour.
Testing Models of Strategic Uncertainty: Equilibrium Selection in Repeated Games
Authors: Emanuel Vespa, Taylor Weidman, Alistair J. Wilson
Date: 2021-01-14 00:00:00
Tasks: counterfactual

In repeated-game applications where both the collusive and non-collusive outcomes can be supported as equilibria, researchers must resolve underlying selection questions if theory will be used to understand counterfactual policies. One guide to selection, based on clear theoretical underpinnings, has shown promise in predicting when collusive outcomes will emerge in controlled repeated-game experiments. In this paper we both expand upon and experimentally test this model of selection, and its underlying mechanism: strategic uncertainty. Adding an additional source of strategic uncertainty (the number of players) to the more-standard payoff sources, we stress test the model. Our results affirm the model as a tool for predicting when tacit collusion is likely/unlikely to be successful. Extending the analysis, we corroborate the mechanism of the model. When we remove strategic uncertainty through an explicit coordination device, the model no longer predicts the selected equilibrium.
Intergenerational transmission of culture among immigrants: Gender gap in education among first and second generations
Authors: Hamid NoghaniBehambari, Nahid Tavassoli, Farzaneh Noghani
Date: 2021-01-12 00:00:00
Tasks: Cultural Vocal Bursts Intensity Prediction

This paper illustrates the intergenerational transmission of the gender gap in education among first and second-generation immigrants. Using the Current Population Survey (1994-2018), we find that the difference in female-male education persists from the home country to the new environment. A one standard deviation increase of the ancestral country female-male difference in schooling is associated with 17.2% and 2.5% of a standard deviation increase in the gender gap among first and second generations, respectively. Since gender perspective in education uncovers a new channel for cultural transmission among families, we interpret the findings as evidence of cultural persistence among first generations and partial cultural assimilation of second generations. Moreover, Disaggregation into country-groups reveals different paths for this transmission: descendants of immigrants of lower-income countries show fewer attachments to the gender opinions of their home country. Average local education of natives can facilitate the acculturation process. Immigrants residing in states with higher education reveal a lower tendency to follow their home country attitudes regarding the gender gap.
The 'COVID' Crash of the 2020 U.S. Stock Market
Authors: Min Shu, Ruiqiang Song, Wei Zhu
Date: 2021-01-10 00:00:00

We employed the log-periodic power law singularity (LPPLS) methodology to systematically investigate the 2020 stock market crash in the U.S. equities sectors with different levels of total market capitalizations through four major U.S. stock market indexes, including the Wilshire 5000 Total Market index, the S&P 500 index, the S&P MidCap 400 index, and the Russell 2000 index, representing the stocks overall, the large capitalization stocks, the middle capitalization stocks and the small capitalization stocks, respectively. During the 2020 U.S. stock market crash, all four indexes lost more than a third of their values within five weeks, while both the middle capitalization stocks and the small capitalization stocks have suffered much greater losses than the large capitalization stocks and stocks overall. Our results indicate that the price trajectories of these four stock market indexes prior to the 2020 stock market crash have clearly featured the obvious LPPLS bubble pattern and were indeed in a positive bubble regime. Contrary to the popular belief that the COVID-19 led to the 2020 stock market crash, the 2020 U.S. stock market crash was endogenous, stemming from the increasingly systemic instability of the stock market itself. We also performed the complementary post-mortem analysis of the 2020 U.S. stock market crash. Our analyses indicate that the 2020 U.S. stock market crash originated from a bubble which began to form as early as September 2018; and the bubbles in stocks with different levels of total market capitalizations have significantly different starting time profiles. This study not only sheds new light on the making of the 2020 U.S. stock market crash but also creates a novel pipeline for future real-time crash detection and mechanism dissection of any financial market and/or economic index.
Using the Econometric Models for Identification of Risk Factors for Albanian SMEs (Case study: SMEs of Gjirokastra region)
Authors: Lorenc Kociu, Kledian Kodra
Date: 2021-01-10 00:00:00
Tasks: regression

Using the econometric models, this paper addresses the ability of Albanian Small and Medium-sized Enterprises (SMEs) to identify the risks they face. To write this paper, we studied SMEs operating in the Gjirokastra region. First, qualitative data gathered through a questionnaire was used. Next, the 5-level Likert scale was used to measure it. Finally, the data was processed through statistical software SPSS version 21, using the binary logistic regression model, which reveals the probability of occurrence of an event when all independent variables are included. Logistic regression is an integral part of a category of statistical models, which are called General Linear Models. Logistic regression is used to analyze problems in which one or more independent variables interfere, which influences the dichotomous dependent variable. In such cases, the latter is seen as the random variable and is dependent on them. To evaluate whether Albanian SMEs can identify risks, we analyzed the factors that SMEs perceive as directly affecting the risks they face. At the end of the paper, we conclude that Albanian SMEs can identify risk
On the Equivalence of Neural and Production Networks
Authors: Roy Gernhardt, Bjorn Persson
Date: 2020-05-01 00:00:00

This paper identifies the mathematical equivalence between economic networks of Cobb-Douglas agents and Artificial Neural Networks. It explores two implications of this equivalence under general conditions. First, a burgeoning literature has established that network propagation can transform microeconomic perturbations into large aggregate shocks. Neural network equivalence amplifies the magnitude and complexity of this phenomenon. Second, if economic agents adjust their production and utility functions in optimal response to local conditions, market pricing is a sufficient and robust channel for information feedback leading to macro learning.
Efficiency and Stability in a Process of Teams Formation
Authors: Leonardo Boncinelli, Alessio Muscillo, Paolo Pin
Date: 2021-03-25 00:00:00

Motivated by data on coauthorships in scientific publications, we analyze a team formation process that generalizes matching models and network formation models, allowing for overlapping teams of heterogeneous size. We apply different notions of stability: myopic team-wise stability, which extends to our setup the concept of pair-wise stability, coalitional stability, where agents are perfectly rational and able to coordinate, and stochastic stability, where agents are myopic and errors occur with vanishing probability. We find that, in many cases, coalitional stability in no way refines myopic team-wise stability, while stochastically stable states are feasible states that maximize the overall number of activities performed by teams.
Conveying Value via Categories
Authors: Paula Onuchic, Debraj Ray
Date: 2021-03-23 00:00:00

A sender sells an object of unknown quality to a receiver who pays his expected value for it. Sender and receiver might hold different priors over quality. The sender commits to a monotonic categorization of quality. We characterize the sender's optimal monotonic categorization. Using our characterization, we study the optimality of full pooling or full separation, the alternation of pooling and separation, and make precise a sense in which pooling is dominant relative to separation. We discuss applications, extensions and generalizations, among them the design of a grading scheme by a profit-maximizing school which seeks to signal student qualities and simultaneously incentivize students to learn. Such incentive constraints force monotonicity, and can also be embedded as a distortion of the school's prior over student qualities, generating a categorization problem with distinct sender and receiver priors.
On the Approximate Purification of Mixed Strategies in Games with Infinite Action Sets
Authors: Yuhki Hosoya, Chaowen Yu
Date: 2021-03-13 00:00:00

We consider a game in which the action set of each player is uncountable, and show that, from weak assumptions on the common prior, any mixed strategy has an approximately equivalent pure strategy. The assumption of this result can be further weakened if we consider the purification of a Nash equilibrium. Combined with the existence theorem for a Nash equilibrium, we derive an existence theorem for a pure strategy approximated Nash equilibrium under sufficiently weak assumptions. All of the pure strategies we derive in this paper can take a finite number of possible actions.
Limited Cognitive Abilities and Dominance Hierarchy
Authors: Hanyuan Huang, Jiabin Wu
Date: 2021-03-20 00:00:00

We propose a novel model to explain the mechanisms underlying dominance hierarchical structures. Guided by a predetermined social convention, agents with limited cognitive abilities optimize their strategies in a Hawk-Dove game. We find that several commonly observed hierarchical structures in nature such as linear hierarchy and despotism, emerge as the total fitness-maximizing social structures given different levels of cognitive abilities.