Repeated Cheap-Talk Games of Common Interest between a Decision-Maker and an Expert of Unknown Statistical Bias

Two agents are engaged in a joint activity that yields a common perperiod payoff at two rounds of play. The expert announces the probability that the current state of the world is low, instead of high, at each stage. Having received the report of the expert, the decision-maker takes action at every period according to his posterior beliefs. At the end of each round of play, the true current state is verifiable. The distinctive assumption of the paper is that the decision-maker makes a subjective appraisal of the expert’s reliability: he considers the expert’s true forecasts as the outcomes of an experiment of unknown statistical bias. The paper shows that the expert will have instrumental reputational concerns, related to the future estimate of the systematic error associated to his predictions. In contrast with previous work, reputational concerns are shown to enhance the credibility of the initial messages, and to increase both the agents’ expected payoff at the first round of play in equilibrium. The equilibrium messages will be noisy, but noisiness will be less costly than it would be in single-stage games.Opinion, Expert, Strategic Communication

The Paradox of New Members in the EU Council of Ministers: A Non-cooperative Bargaining Analysis

Power indices suggest that adding new members to a voting body may increase the power of an existing member, even if the number of votes of all existing members and the decision rule remain constant. This phenomenon is known as the paradox of new members. This paper uses the leading model of majoritarian bargaining and shows that the paradox is predicted in equilibrium for past EU enlargements. Furthermore, a majority of members would have been in favor of the 1981 enlargement even if members were bargaining over a fixed budget.Majoritarian Bargaining, Weighted Voting, Power Measures, EU Enlargement, Paradox of New Members

Corruption, trade costs, and gains from tariff liberalization: evidence from Southern Africa

This paper exploits quasi-experimental variation in tariffs in southern Africa to estimate trade elasticities. Traded quantities respond only weakly to a 30 percent reduction in the average nominal tariff rate. Trade flow data combined with primary data on firm behavior and bribe payments suggest that corruption is a potential explanation for the observed low elasticities. In contexts of pervasive corruption, even small bribes can significantly reduce tariffs, making tariff liberalization schemes less likely to affect the extensive and the intensive margins of firms' import behavior. The tariff liberalization scheme is, however, still associated with improved incentives to accurately report quantities of imported goods, and with a significant reduction in bribe transfers from importers to public officials

The Impact of Protest Responses in Choice Experiments

Not much attention has been given to protest responses in choice experiments (CE). Using follow-up statements, we are able to identify protest responses and compute welfare estimates with and without the inclusion of such protest responses. We conclude that protest responses are fairly common in CE, and their analysis affects the statistical performance of the empirical models. In particular, when the sample is corrected by protests, our results come from utility consistent models. Thus, future choice experiments should consider the role of protest responses as contingent valuation studies have done.Protest Responses, Choice Experiments

Poolability and Aggregation Problems of Regional Innovation Data: An Application to Nanomaterial Patenting

Research and development (R&D) in the field of nanomaterials is expected to be a major driver of innovation and economic growth. In this respect, many countries, as national systems of innovation, have established support programs offering subsidies for industry- and government-funded R&D. Consequently, it is of great interest to understand which factors facilitate the creation of new technological knowledge. The existing literature has typically addressed this question by employing a knowledge production function based on firm-, regional- or even country-level data. Estimating the effects for the entire national system of innovation, however, implicitly assumes poolability of regional data. We apply our reasoning to Germany, which has well-known – and wide – regional disparities, for example between the former East and West. Based on analyses at the level of NUTS-3 regions, we find different knowledge production functions for the East and the West. Moreover, we investigate how our results are affected by the adoption of alternative aggregation levels. Our findings have implications for further research in the field, that is, a careful evaluation of poolability and aggregation is required before estimating knowledge production functions at the regional level. Policy considerations are offered as well.nanotechnology, patents, poolability, aggregation, Germany, spatial autocorrelation, spatial filtering

MODELING TROPICAL DEFORESTATION: A SURVIVAL ANALYSIS LINKING SATELLITE AND HOUSEHOLD SURVEY DATA

This research estimates a hazard model of forest conversion in southern Mexico using geographical information systems, household survey data, and satellite imagery. A utility-maximizing model consistent with agricultural frontier conditions is developed. The econometric methodology incorporates temporal dynamics into the otherwise static range of analyses possible using categorical satellite data.Resource /Energy Economics and Policy,