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Forensics, Elasticities and Benford's Law

Demir, Banu - 2019

Estimates of the trade elasticity based on actual trade policy changes are scarce, and the few that exist are all over the place. This paper offers a setting where an exogenous increase in a border tax can be used to estimate the trade elasticity. It shows theoretically and empirically that if...

Persistent link: https://www.econbiz.de/10012892309

The Distribution of Ambiguity Attitudes

Gaudecker, Hans-Martin von; Wogrolly, Axel; Zimpelmann, … - 2022

This paper analyzes the stability and distribution of ambiguity attitudes using a broad population sample. Using high-powered incentives, we collected six waves of data on ambiguity attitudes about financial markets—our main application—and climate change. Estimating a structural stochastic...

Persistent link: https://www.econbiz.de/10014241994

Do Firms Gain from Managerial Overconfidence? The Role of Severance Pay

Graziano, Clara; Luporini, Annalisa - 2022

We analyze the effects of optimism and overconfidence when the manager’s compensation package includes severance pay and the CEO has bargaining power. We find that optimism does not affect incentive pay but increases severance pay with a negative effect on profit. Overconfidence, on the...

Persistent link: https://www.econbiz.de/10014082159

The Cultural Roots of Firm Entry, Exit, and Growth

Erhardt, Katharina; Haenni, Simon - 2021

Can culture explain persistent differences in economic activity among individuals and across regions? A novel measure of cultural origin enables us to contrast the entrepreneurial activity of individuals located in the same municipality but whose ancestors lived just on opposite sides of the...

Persistent link: https://www.econbiz.de/10013218291

The Sword and the Shield : The Economics of Targeted Sanctions

Ahn, Daniel P. - 2019

How effective are “smart” sanctions in imposing costs on an adversary? We consider this question in a model where a targeted regime may choose to “shield” strategically important firms from harm. Using detailed firm and individual data, we estimate the impact on firm performance from...

Persistent link: https://www.econbiz.de/10012871020

Uncertainty, Imperfect Information, and Expectation Formation Over the Firms's Life Cycle

Chen, Cheng - 2020

Using a long-panel dataset of Japanese firms that contains firm-level sales forecasts, we provide evidence on firm-level uncertainty and imperfect information over their life cycle. We find that firms make non-negligible and positively correlated forecast errors. However, they make more precise...

Persistent link: https://www.econbiz.de/10012826001

The Evolution of Zipf's Law for U.S. Cities

Hackmann, Angelina - 2018

Exploiting the cascade structure of cities and based on a dataset for U.S. cities between 1840 and 2016, the aim of this short paper is to answer three important questions: First, do we observe that the U.S. city size distribution exhibits a smooth transition to Zipf's law from the beginning or...

Persistent link: https://www.econbiz.de/10012908669

Salience and Skewness Preferences

Dertwinkel-Kalt, Markus - 2019

skewed risks. We show that salience theory of choice under risk can explain this preference for positive skewness, because … unlikely, but outstanding payoffs attract attention. In contrast to alternative models, however, salience theory predicts that … preferences—typically attributed to cumulative prospect theory—are more naturally accommodated by salience theory …

Persistent link: https://www.econbiz.de/10012892170

Time Will Tell : Recovering Preferences When Choices are Noisy

Alós-Ferrer, Carlos - 2019

The ability to uncover preferences from choices is fundamental for both positive economics and welfare analysis. Overwhelming evidence shows that choice is stochastic, which has given rise to random utility models as the dominant paradigm in applied microeconomics. However, as is well known, it...

Persistent link: https://www.econbiz.de/10012892249

Happy Times : Measuring Happiness Using Response Times

Liu, Shuo; Netzer, Nick - 2023

Surveys that measure subjective states like happiness or preferences often generate discrete ordinal data. Ordered response models, which are commonly used to analyze such data, suffer from a fundamental identification problem. Their conclusions depend on unjustified assumptions about the...

Persistent link: https://www.econbiz.de/10014358107