On the existence and stability of equilibria in N-firm Cournot–Bertrand oligopolies

Theory and Decision - The majority consensus in the empirical literature is that probability weighting functions are typically inverse-S shaped, that is, people tend to overweight small and...     

Overcoming barriers to integrating economic analysis into risk assessment

Regulatory risk analysis is designed to provide decisionmakers with a clearer understanding of how policies are likely to affect risk. The systems that produce risk are biological, physical, and social and economic. As a result, risk analysis is an inherently interdisciplinary task. Yet in practice, risk analysis has been interdisciplinary in only limited ways. Risk analysis could provide more accurate assessments of risk if there were better integration of economics and other social sciences into risk assessment itself. This essay examines how discussions about risk analysis policy have influenced the roles of various disciplines in risk analysis. It explores ways in which integrated bio/physical-economic modeling could contribute to more accurate assessments of risk. It reviews examples of the kind of integrated economics-bio/physical modeling that could be used to enhance risk assessment. The essay ends with a discussion of institutional barriers to greater integration of economic modeling into risk assessment and provides suggestions on how these might be overcome.     

Assessing University Students’ Self-efficacy to Employ Alcohol-Related Harm Reduction Strategies

Abstract

Objective: Develop and evaluate key psychometric properties of a self-report questionnaire specifically designed to assess student drinkers’ self-confidence to employ a variety of strategies intended to reduce unhealthy consequences of high-risk drinking. Methods: Four hundred ninety-eight participants rated their confidence (from “not at all confident” to “completely confident”) to employ 17 harm reduction strategies when drinking. Results: Factor analysis and internal consistency reliability analyses indicated that the 17 items constitute a single scale with good test–retest reliability. Consistent with other research examining previous use of such strategies, women in our sample reported significantly higher harm reduction self-efficacy than did men. Harm reduction self-efficacy was also associated with reported number of high-risk drinking episodes in the previous 2 weeks. Conclusion: This brief and easily administered questionnaire holds promise as a clinical tool to identify individuals with low harm reduction self-efficacy and as an outcome measure for health promotion and educational interventions.     

Enforcement of property rights in a barter economy

If property rights to consumption goods are insecure, the incentives to trade in a barter economy are reshaped. In a pure exchange economy, we examine the case where two contestable consumption goods are vital to two agents and initial endowments follow a binary distribution. In line with the existing literature, we examine in a two-stage game how the equilibrium security of claims to property is determined. We find that, depending on the exogenous preference and appropriation-effectiveness parameters, two different regimes emerge in equilibrium: trade and appropriation, and peaceful coexistence, with the latter regime exhibiting efficiency with respect to the goods traded. However, inefficiencies arise due to the investment in defensive activities necessary to deter appropriation. Thus, we have found an endogenously determined measure for the transaction cost underlying a market which replicates the outcome of a Walrasian market.     

Efficient volatility estimation in a two-factor model

We statistically analyze a multivariate Heath-Jarrow-Morton diffusion model with stochastic volatility. The volatility process of the first factor is left totally unspecified while the volatility of the second factor is the product of an unknown process and an exponential function of time to maturity. This exponential term includes some real parameter measuring the rate of increase of the second factor as time goes to maturity. From historical data, we efficiently estimate the time to maturity parameter in the sense of constructing an estimator that achieves an optimal information bound in a semiparametric setting. We also nonparametrically identify the paths of the volatility processes and achieve minimax bounds. We address the problem of degeneracy that occurs when the dimension of the process is greater than two, and give in particular optimal limit theorems under suitable regularity assumptions on the drift process. We consistently analyze the numerical behavior of our estimators on simulated and real datasets of prices of forward contracts on electricity markets.     

Die Abgeltungsteuer auf Kursgewinne und der Steuerstundungseffekt in der Unternehmensbewertung

In Germany capital gains have to be taxed independently of the holding period, according to the withholding tax regulations. Nevertheless, investors can initially avoid taxation by not realizing capital gains. Then, taxes are postponed into the future. Thereby investors can make use of an interest-free tax loan (tax deferral). Equally beneficial would be the immediate realization of negative capital gains, if this leads to reduced taxes by balancing these losses against other gains. The potential use of interest-free tax loans leads to the necessity of making assumptions on the investors?? strategy with respect to liquidation when it comes to business valuation based on discounting future after-tax payments towards investors (DCF-methods). It will be shown how much firm value depends on these assumptions by taking alternative, inflexible and flexible strategies of investors into account. Our considerations generate a lower and an upper bound for the firm value, and easier to calculate medium values. The calculations are illustrated by a numerical example which is also the subject of a comparative static analysis.     

A Note on the Kuks-Olman Estimator

In the linear regression model the unknown parameter vector θ is supposed to vary in a known ellipsoid. Under this parameter constraint Kuks and Olman derived an estimator by demanding a minimax property. Since sometimes the Kuks-Olman estimator takes values outside of the ellipsoid a modification is proposed in the paper. It is shown that this modified variant is a least squares estimator in the restricted model.     

Robust alternatives of the least squares estimator

The purpose of this paper consists in deriving estimators which are less sensitive than the least squares estimator, when the assumption that the expectation vector lies in a certain linear subspace is violated. The obtained robust estimators are convex combinations of the least squares estimator and of the random vector Y.