pwc-archive/papers-with-abstracts huggingface dataset:
A Perfect Storm: First-Nature Geography and Economic Development
Authors: Christian Vedel
Date: 2024-08-01 00:00:00

In 1825 a storm cut a new channel through Denmark's Limfjord, providing an exogenous shock to first-nature geography. Difference-in-differences estimates show the channel increased trade immediately and, within a generation, lifted population by 26.7 percent - an elasticity of 1.6 relative to the improved market access. Higher fertility and economic growth of new industries, not migration, drove the expansion. A mirror experiment - the waterway's closure circa 1086-1208 - caused symmetric declines in medieval coin and building finds, bolstering external validity. These results offer the first robust causal evidence that first-nature geomorphology shapes the location of economic activity.
Hydrological collapse in southern Spain under expanding irrigated agriculture: Meteorological, hydrological, and structural drought
Authors: Victoria Junquera, Daniel I. Rubenstein, Simon A. Levin, José I. Hormaza, Iñaki Vadillo Pérez, Pablo Jiménez Gavilán
Date: 2024-08-01 00:00:00

Spain is the largest producer of avocado and mango fruits in Europe. The majority of production is concentrated in the Axarqu\'ia region in the south, where subtropical fruit plantations and associated water demands have steadily increased over the last two decades. Between 2019-2024, the region underwent an extreme water crisis. Reservoir reserves became nearly depleted and groundwater levels dropped to sea level in several locations, where seawater intrusion is likely, causing large socioeconomic impacts including short-term harvest losses and a long-term loss in economic centrality. We examine the causal pathway that led to this crisis using a mixed-methods approach, combining data from key informant interviews, an exhaustive review of legal documents, and quantitative analysis of time series and spatially explicit data. In particular, we analyze dam water use for irrigation and urban use, meteorological data, reservoir and groundwater levels, and irrigation land cover maps. Our findings show that an unusual meteorological drought was the immediate cause for the decline in reservoir and groundwater reserves (hydrological drought), but the underlying cause was a chronic and structural long-term imbalance between water demand and resources resulting from several structural governance shortcomings: large uncertainties in water resource availability and use hampering effective planning, lack of enforcement of individual water quotas, and the absence of regulatory mechanisms to flexibly impose resource use restrictions at both micro and macro levels based on the overall resources of the system. We propose concrete policy interventions aimed at sustainably enhancing the resilience of the system that can be useful to efficiently manage water shortages in other regions with similar problems.
Jumping on the bandwagon and off the Titanic: an experimental study of turnout in two-tier voting
Authors: Yoichi Hizen, Kazuya Kikuchi, Yukio Koriyama, Takehito Masuda
Date: 2024-08-01 00:00:00
Tasks: All

We experimentally study voter turnout in two-tier elections when the electorate consists of multiple groups, such as states. Votes are aggregated within the groups by the winner-take-all rule or the proportional rule, and the group-level decisions are combined to determine the winner. We observe that, compared with the theoretical prediction, turnout is significantly lower in the minority camp (the Titanic effect) and significantly higher in the majority camp (the behavioral bandwagon effect), and these effects are stronger under the proportional rule than under the winner-take-all rule. As a result, the distribution of voter welfare becomes more unequal than theoretically predicted, and this welfare effect is stronger under the proportional rule than under the winner-take-all rule.
Price formation without fuel costs: the interaction of demand elasticity with storage bidding
Authors: Tom Brown, Fabian Neumann, Iegor Riepin
Date: 2024-07-31 00:00:00

Studies looking at electricity market designs for very high shares of wind and solar often conclude that the energy-only market will break down. Without fuel costs, it is said that there is nothing to set prices. Symptoms of breakdown include long phases of zero prices, scarcity prices too high to be politically acceptable, prices that collapse under small perturbations of capacities from the long-term equilibrium, cost recovery that is impossible due to low market values, high variability of revenue between different weather years, and difficulty operating long-term storage with limited foresight. We argue that all these problems are an artefact of modelling with perfectly inelastic demand. If short-term elasticity to reflect today's flexible demand (-5%) is implemented, these problems are reduced. The interaction of demand willingness to pay and storage opportunity costs is enough to produce stable pricing. This behavior is illustrated by a model with wind, solar, batteries, and hydrogen-based storage, where the price duration curve is smoothed with a piecewise linear demand curve. This removes high price peaks, reduces the fraction of zero-price hours from 90% to around 30%, and guarantees more price stability for perturbations of capacity and different weather years. Furthermore, we show that with demand elasticity, the long-term optimisation model exactly reproduces the prices of the short-term model with the same capacities. We then use insights from the long-term model to derive simple bidding strategies for storage so that we can also run the short-term model with limited operational foresight. We demonstrate this short-term operation in a model optimised using 35 years of weather data and then tested on another 35 years of unseen data. We conclude that the energy-only market can still play a key role in coordinating dispatch and investment in the future.
Nonparametric Estimation of Matching Efficiency and Mismatch in Labor Markets via Public Employment Security Offices in Japan, 1972-2024
Authors: Suguru Otani
Date: 2024-07-30 00:00:00

I examine changes in matching efficiency and elasticities in Japan's labor market via Hello Work for unemployed workers from January 1972 to April 2024 using a nonparametric identification approach by y Lange and Papageorgiou (2020). I find a declining trend in matching efficiency, consistent with decreasing job and worker finding rates. The implied match elasticity with respect to unemployment is 0.5-0.9, whereas the implied match elasticity with respect to vacancies varies between -0.4 and 0.4. Decomposing aggregate data into full-time and part-time ones, I find that the sharp decline of matching efficiency after 2015 shown in the aggregate trend is driven by the decline of both full-time and part-time ones. Second, I extend the mismatch index proposed by Sahin et al (2014) to the nonparametric version and develop the computational methodology. I find that the mismatch across occupations is more severe than across prefectures and the original Cobb-Douglas mismatch index is underestimated.
Close to Home: Analyzing Urban Consumer Behavior and Consumption Space in Seoul
Authors: Hyoji Choi, Frank Neffke, Donghyeon Yu, Bogang Jun
Date: 2024-07-30 00:00:00

This study explores how the relatedness density of amenities influences consumer buying patterns, focusing on multi-purpose shopping preferences. Using Seoul's credit card data from 2018 to 2023, we find a clear preference for shopping at amenities close to consumers' residences, particularly for trips within a 2 km radius, where relatedness density significantly influences purchasing decisions. The COVID-19 pandemic initially reduced this effect at shorter distances but rebounded in 2023, suggesting a resilient return to pre-pandemic patterns, which vary over regions. Our findings highlight the resilience of local shopping preferences despite economic disruptions, underscoring the importance of amenity-relatedness in urban consumer behavior.
Unemployment Benefits and Job Quality: Unveiling the Complexities of Labour Market Dynamics
Authors: Jessica Reale, Frederik Banning, Michael Roos
Date: 2024-07-29 00:00:00

This study explores the impact of unemployment benefits on employment quality, job stability, and tenure within complex labour market dynamics. Given the macroeconomic consequences of changes in unemployment benefits, including their impact on employment rates and output growth, we develop a closed macroeconomic model that integrates heterogeneous households and adaptive firms and incorporates real-world entry-exit market mechanisms. The model considers personal values, social norms, and social network formation among workers as we examine the role of social contacts in mediating the effects of unemployment benefits on job-matching quality and labour market outcomes. We simulate the model across various scenarios where unemployment benefit schemes differ in level and/or duration. Our results suggest that extending the duration of unemployment benefits does not necessarily improve job-matching quality. Longer benefits may indeed reduce the effectiveness of social networks in job finding, indicating that social contacts play a key role in labour market dynamics.
"How lonely are you?" The role of social contacts and farm characteristics in farmers' self-reported feelings of loneliness, and why it matters
Authors: Victoria Junquera, Daniel I. Rubenstein, Florian Knaus
Date: 2024-07-29 00:00:00

Loneliness and social isolation among farmers are growing public health concerns. The contributing factors are manifold, and some of them are linked to structural change in agriculture, for instance because of higher workloads, rural depopulation, or reduced opportunities for collaboration. Our work explores the interconnections between loneliness, social contacts, and structural factors in agriculture based on a survey of 110 farm managers in the mountain region of Entlebuch, Switzerland combined with agricultural census data. We use path analysis, in which loneliness is the main outcome, and social contacts are an explanatory and explained variable. We find that 3% of respondents report that they feel lonely frequently or very frequently, and the rest sometimes (20%), rarely (40%) or never (38%). Managers with higher workloads report feeling lonely more frequently, and this relationship is direct, as well as indirect because of less frequent social contacts. However, physical isolation is not a significant predictor of loneliness. Moreover, short food supply chains correlate with less frequent loneliness feelings. Our study sheds light on the effects that structural change can have on the social fabric of rural areas.
Redefining Urban Centrality: Integrating Economic Complexity Indices into Central Place Theory
Authors: Jonghyun Kim, Donghyeon Yu, Hyoji Choi, Dongwoo Seo, Bogang Jun
Date: 2024-07-29 00:00:00

This study introduces a metric designed to measure urban structures through the economic complexity lens, building on the foundational theories of urban spatial structure, the Central Place Theory (CPT) (Christaller, 1933). Despite the significant contribution in the field of urban studies and geography, CPT has limited in suggesting an index that captures its key ideas. By analyzing various urban big data of Seoul, we demonstrate that PCI and ECI effectively identify the key ideas of CPT, capturing the spatial structure of a city that associated with the distribution of economic activities, infrastructure, and market orientation in line with the CPT. These metrics for urban centrality offer a modern approach to understanding the Central Place Theory and tool for urban planning and regional economic strategies without privacy issues.
Identifying and Quantifying (Un)Improvable Students
Authors: Josue Ortega, Gabriel Ziegler, R. Pablo Arribillaga, Geng Zhao
Date: 2024-07-29 00:00:00
Tasks: valid

The Deferred Acceptance (DA) mechanism can generate inefficient placements. Although Pareto-dominant mechanisms exist, it remains unclear which and how many students could improve. We characterize the set of unimprovable students and show that it includes those unassigned or matched with their least preferred schools. Nevertheless, by proving that DA's envy digraph contains a unique giant strongly connected component, we establish that almost all students are improvable, and furthermore, they can benefit simultaneously via disjoint trading cycles. Our findings reveal the pervasiveness of DA's inefficiency and the remarkable effectiveness of Pareto-dominant mechanisms in addressing it, regardless of the specific mechanism chosen.
Bargaining via Weber's law
Authors: V. G. Bardakhchyan, A. E. Allahverdyan
Date: 2024-08-05 00:00:00
Tasks: Fairness

We solve the two-player bargaining problem employing Weber's law in psychophysics, which is applied to the perception of utility changes. Using this law, the players define the jointly acceptable range of utilities on the Pareto line, which narrows down the range of possible solutions. Choosing a unique solution can be achieved by applying the Weber approach iteratively. The solution is covariant to independent affine transformations of utilities. We provide a behavioral interpretation of this solution, where the players negotiate via Weber's law. For susceptible players, iterations are unnecessary, so they converge in one stage toward the (axiomatic) asymmetric Nash solution of the bargaining problem, where the weights of each player are expressed via their Weber constants. Thus the Nash solution is reached without external arbiters and without requiring the independence of irrelevant alternatives. We also show that our solution applies to the ultimatum game (which is not bargaining but still involves offer formation) and leads to an affine-covariant solution of this game that can reproduce its empirical features. Unlike previous solutions (e.g. the one based on fairness), ours does not involve comparing inter-personal utilities and is based on a partial symmetry between the proposer and respondent.
The Logic of Political Survival Revisited: Consequences of Elite Uncertainty Under Authoritarian Rule
Authors: Tamar Zeilberger
Date: 2024-08-04 00:00:00
Tasks: Math

Existing research has established that autocrats offer concessions to prevent ouster by their inner circle. This paper examines how those concessions are influenced by the relative uncertainty of an autocrat's inner circle about remaining in that favored body. I take as my starting point the formal model of political survival presented in Bueno de Mesquita et al.'s The Logic of Political Survival. I extend the model to account for variation in the relative uncertainty of an autocrat's inner circle. To make the math tractable, I dispense with convention and introduce comparative statics across two models with different formulations of uncertainty. This exercise reveals a set of conditions under which to expect an increase in the concessions offered by an autocrat, with implications for development and democracy. Those findings yield a corresponding set of logical corollaries with potential to further our understanding of authoritarian politics, including an unexamined facet of the "dictator's dilemma" (Wintrobe 1990, 1998) and related incentives for members of an inner circle to permit purges or act to destabilize their ranks. The models also identify a source of policy volatility not found outside of autocracies. Taken together, the findings suggest a need for more research on elite uncertainty in autocracies.
Strategic Analysis of Fair Rank-Minimizing Mechanisms with Agent Refusal Option
Authors: Yasunori Okumura
Date: 2024-08-03 00:00:00
Tasks: Fairness

This study examines strategic issues in fair rank-minimizing mechanisms, which choose an assignment that minimizes the average rank of object types to which agents are assigned and satisfy a fairness property called equal treatment of equals. As one of these fair mechanisms, the uniform rank-minimizing mechanism is considered. We focus on the case where agents can refuse their assignment and obtain the outside option instead. Without the refusal option, truth-telling is not strategically dominated by any strategies if a fair rank-minimizing mechanism is employed. However, if agents have the option and the uniform rank-minimizing mechanism is employed, then a strategy called an outside option demotion strategy strategically dominates truth-telling. Moreover, we show that adopting this strategy may lead to inefficient assignments. To counter this, we consider a modification of the uniform rank-minimizing mechanism, though it may lead agents to strategically reduce the number of acceptable types.
Harmful choices
Authors: Angelo Petralia
Date: 2024-08-02 00:00:00

We investigate the choice behavior of a decision maker (DM) who harms herself, by maximizing in each menu some distortion of her true preference, in which the first i alternatives are moved to the bottom, in a reversed order. The deterministic declination of our pattern has no empirical power, but it allows to define a degree of self-punishment, which measures the extent of the denial of pleasure adopted by the DM in her decision. We analyze irrational choices that display the lowest degree of self-punishment, and a characterization of them is provided. Moreover, we characterize the choice behavior that exhibits the highest degree of self-punishment, and we show that it comprises almost all choices. We also characterize stochastic self-punishment, which collects all the Random Utility Models (RUMs) whose support is restricted to the harmful distortions of some preference. Necessary and sufficient conditions for a full identification of the DM's preference and randomization over its harmful distortions are singled out. Finally, the degree of self-punishment of harmful stochastic choices is characterized.
Persuading an inattentive and privately informed receiver
Authors: Pietro Dall'Ara
Date: 2024-08-02 00:00:00

This paper studies the persuasion of a receiver who accesses information only if she exerts costly attention effort. A sender designs an experiment to persuade the receiver to take a specific action. The experiment affects the receiver's attention effort, that is, the probability that she updates her beliefs. As a result, persuasion has two margins: extensive (effort) and intensive (action). The receiver's utility exhibits a supermodularity property in information and effort. By leveraging this property, we prove a general equivalence between experiments and persuasion mechanisms \`a la Kolotilin et al.\ (2017). In applications, the sender's optimal strategy involves censoring favorable states.
What does a dynamic oligopoly maximize? The continuous time Markov case
Authors: Juan Pablo Rincón-Zapatero
Date: 2024-07-30 00:00:00

We analyze the question of whether the outcome of an oligopoly exploiting a nonrenewable resource can be replicated by a related monopoly, within the framework of continuous time and Markov Perfect Nash Equilibrium. We establish necessary and sufficient conditions and find explicit solutions in some cases. Also, very simple models with externalities are shown which Nash equilibrium cannot be replicated in a monopoly.
Certifying Lemons
Authors: Hershdeep Chopra
Date: 2024-07-29 00:00:00

This paper examines an adverse selection environment where a sender with private information (high or low ability) tries to convince a receiver of having higher ability. Without commitment or costly signaling, market failure can occur. Certification intermediaries reduce these frictions by enabling signaling through hard information. This paper focuses on a monopolistic certifier and its impact on equilibrium welfare and certificate design. Key findings show that the certifier provides minimal information, pooling senders of varying abilities and leaving low rents for high type senders, which typically disadvantages the receiver. However, when precise information is demanded, the certifier screens the sender perfectly, benefiting the receiver. Thus, the monopolistic intermediary has an ambiguous effect on market efficiency. The results emphasize the importance of high certification standards, which drive low ability senders out of the market. Conditions for such equilibria are characterized, showing how simple threshold strategies by the receiver induce first-best outcomes. Additionally, the relationship between the characteristics of offered certificates and welfare is identified.
Getting the Agent to Wait
Authors: Maryam Saeedi, Yikang Shen, Ali Shourideh
Date: 2024-07-26 00:00:00

We examine the strategic interaction between an expert (principal) maximizing engagement and an agent seeking swift information. Our analysis reveals: When priors align, relative patience determines optimal disclosure -- impatient agents induce gradual revelation, while impatient principals cause delayed, abrupt revelation. When priors disagree, catering to the bias often emerges, with the principal initially providing signals aligned with the agent's bias. With private agent beliefs, we observe two phases: one engaging both agents, followed by catering to one type. Comparing personalized and non-personalized strategies, we find faster information revelation in the non-personalized case, but higher quality information in the personalized case.
Beyond Orthography: Automatic Recovery of Short Vowels and Dialectal Sounds in Arabic
Authors: Yassine El Kheir, Hamdy Mubarak, Ahmed Ali, Shammur Absar Chowdhury
Date: 2024-08-05 00:00:00

This paper presents a novel Dialectal Sound and Vowelization Recovery framework, designed to recognize borrowed and dialectal sounds within phonologically diverse and dialect-rich languages, that extends beyond its standard orthographic sound sets. The proposed framework utilized a quantized sequence of input with(out) continuous pretrained self-supervised representation. We show the efficacy of the pipeline using limited data for Arabic, a dialect-rich language containing more than 22 major dialects. Phonetically correct transcribed speech resources for dialectal Arabic are scarce. Therefore, we introduce ArabVoice15, a first-of-its-kind, curated test set featuring 5 hours of dialectal speech across 15 Arab countries, with phonetically accurate transcriptions, including borrowed and dialect-specific sounds. We described in detail the annotation guideline along with the analysis of the dialectal confusion pairs. Our extensive evaluation includes both subjective -- human perception tests and objective measures. Our empirical results, reported with three test sets, show that with only one and half hours of training data, our model improve character error rate by ~ 7\% in ArabVoice15 compared to the baseline.
Concerns for Self-Localization of Ad-Hoc Arrays Using Time Difference of Arrivals
Authors: Faxian Cao
Date: 2024-08-01 00:00:00

This document presents some insights and observations regarding the paper that was published in IEEE Transactions on Signal Processing (TSP), titled "Self-Localization of Ad-Hoc Arrays Using Time Difference of Arrivals". In the spirit of constructive feedback, I wish to highlight two key areas of consideration. The first pertains to aspects related to methodology, experimental results, and statements made in the paper. The second part addresses specific equation/typographical errors. This work aims to initiate a constructive dialogue concerning certain aspects of the paper published in IEEE TSP. Our intention is to provide feedback that contributes to the ongoing improvement of the paper's robustness and clarity.