Introducing the IT Economics Department

The new IT Economics department seeks to advance the understanding of various microeconomic and macroeconomic issues that IT managers need to examine in their decisions to adopt and implement information and communications technology-related systems, services, processes, and practices

The Effect of Frivolous Lawsuits on the Settlement of Litigation

It is commonly alleged that a substantial proportion of lawsuits are frivolous and are filed only for their nuisance value. This paper models settlement bargaining in the presence of frivolous suits as a game of asymmetric information, where the plaintiff knows the true meris of his claim, and the defendant does not, apart from any inferences he can draw from the fact of suit. When there is free entry to the opportunity to make a frivolous claim, the profit from doing so is driven to zero, and the surplus from settlement bargaining is completely dissipated. Several policies dealing with frivolous suits are examined; it turns out that requiring a losing litigant to pay the expenses of the winner (the English rule) does not alleviate the problem, but introducing a refundable deposit does.Center for Research on Economic and Social Theory, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100806/1/ECON266.pd

Relative Performance Pay in the Shadow of Crisis

We analyze whether incentives from relative performance pay are reduced or enhanced if a department is possibly terminated due to a crisis. Our benchmark model shows that incentives decrease in a severe crisis, but are boosted given a minor crisis since efforts are strategic complements in the former case but strategic substitutes in the latter one. We tested our predictions in a laboratory experiment. The results confirm the effort ranking but show that in a severe crisis individuals deviate from equilibrium significantly stronger than in other situations. This behavior contradicts the benchmark model and leads to a five times higher survival probability of the department. We develop a new theoretical approach that may explain players’ behavior

Heterogeneity in inflation persistence and optimal monetary policy

Ankara : The Department of Economics, The Institute of Economics and Social Sciences of Bilkent University, 2009.Thesis (Master's) -- Bilkent University, 2009.Includes bibliographical references leaves 27-28.In ation persistence di ers substantially across sectors. This paper analyzes the relevance of sectoral in ation persistence di erentials for optimal monetary policy using a two-sector sticky price model, which generalizes the models existing in the literature by introducing in ation persistence to both sectors. Heterogeneity in in ation persistence results from introduction of di erent price setting mechanisms across sectors. The literature suggests that in purely forward looking models, when the degree of nominal rigidity is uniform across sectors, it is optimal to target the CPI in ation. In this paper, the degree of nominal rigidity, which is computed according to the approximate measure proposed by Benigno and Lopez-Salido (2006), is uniform across sectors but the same rigidity is produced by di erent combinations of price change frequency and backward looking behavior. Based on a second order approximation to the utility function, rst the fully optimal monetary policy is computed. Then, using the fully optimal policy as a benchmark, the performance of the CPI in ation targeting rule proposed by Benigno and Lopez- Salido and the optimal in ation targeting policy are compared under di erent parameter combinations culminating to the same degree of nominal rigidity but generating di erent degrees of in ation persistence across sectors. Welfare analysis shows that adopting CPI in ation targeting instead of optimal in ation targeting implies a signi cant increase in deadweight loss. This loss is highest when one of the sectors has in ation persistence close to zero.Alp, Sevim KösemM.S

A Conversation with Leo Goodman

Leo A. Goodman was born on August 7, 1928 in New York City. He received his A.B. degree, summa cum laude, in 1948 from Syracuse University, majoring in mathematics and sociology. He went on to pursue graduate studies in mathematics, with an emphasis on mathematical statistics, in the Mathematics Department at Princeton University, and in 1950 he was awarded the M.A. and Ph.D. degrees. His statistics professors at Princeton were the late Sam Wilks and John Tukey. Goodman then began his academic career as a statistician, and also as a statistician bridging sociology and statistics, with an appointment in 1950 as assistant professor in the Statistics Department and the Sociology Department at the University of Chicago, where he remained, except for various leaves, until 1987. He was promoted to associate professor in 1953, and to professor in 1955. Goodman was at Cambridge University in 1953--1954 and 1959--1960 as visiting professor at Clare College and in the Statistical Laboratory. And he spent 1960--1961 as a visiting professor of mathematical statistics and sociology at Columbia University. He was also a research associate in the University of Chicago Population Research Center from 1967 to 1987. In 1970 he was appointed the Charles L. Hutchinson Distinguished Service Professor at the University of Chicago, a title that he held until 1987. He spent 1984--1985 at the Center for Advanced Study in the Behavioral Sciences in Stanford. In 1987 he was appointed the Class of 1938 Professor at the University of California, Berkeley, in the Sociology Department and the Statistics Department. Goodman's numerous honors include honorary D.Sc. degrees from the University of Michigan and Syracuse University, and membership in the National Academy of Sciences, the American Academy of Arts and Sciences, and the American Philosophical Society.Comment: Published in at http://dx.doi.org/10.1214/08-STS276 the Statistical Science (http://www.imstat.org/sts/) by the Institute of Mathematical Statistics (http://www.imstat.org

Supporting policy packages: the future of road pricing in the UK

Transport is already a large component of our economy and society. Historically, transport programmes were substantially about developing basic infrastructure networks. Now the emphasis is on the active management of systems and operating them to maximum advantage in the face of growing travel demand and capacity limitations. Combined developments in technology and the world economy have accelerated change to almost unpredictable levels. The change affects many areas and transport is not an exception. With new vehicle technologies, radical policies and the persistent growth in private and commercial vehicles, a new changing transport landscape is emerging. One of these changes comes in the form of sustainable transport management - managing the demand of existing infrastructure networks. The role of demand management has been illustrated in many reports and papers and it seems that governments are becoming more aware of it. This paper focuses on one particular demand management policy that is often regarded as radical and generally unacceptable. Road pricing often gets delayed or abandoned due to controversy, disagreements, unanticipated problems and a whole host of other delaying factors. There are complex interactions in transport management - there is a need for cooperation between networks, stakeholders and different authorities. Single measures that focus on 'sustainable transport' usually address a limited set of objectives and are not usually combined with other policy measures. When combined, it is sometimes unclear whether the multiple interactions between policy tools and implementation networks have been considered. An emerging case of implementation of a policy package in the UK is the support of road pricing initiatives combined with public transport improvements by the Transport Innovation Fund. The paper will present a review of the UK road pricing situation along with key implementation factors that show firstly the importance of combining policy tools and secondly the necessity in creating and maintaining strong implementation networks

The digitalization features of the Russian social media market insurance service

Purpose: The article aims to identify the features of digital techniques introduction and functioning in the insurance industry and the social insurance system. The information techniques used allows to quickly and with the best results to process large amounts of data, thereby increasing the efficiency of all the spheres to reduce social and commercial risks. Design/Methodology/Approach: In order to substantiate introducing the digital techniques expediency in the activity of the insurance system, it is necessary, first, to consider the advantages and disadvantages of information techniques use in the commercial and social insurance. Second, to describe the main digital programs, the implementation of which will increase the targeting and personalization of insurance services. Findings: For the digital techniques introduction in the sphere of insurance relations it is necessary to form the wholly new structure of insurance assets that meet the priorities of the digital economy; to create the necessary conditions for the development and implementation of modern actuarial techniques; to create conditions for increasing incomes and the life standard of the population in order to stimulate demand for insurance services; to change the structure and quality of social services. Practical implications: The results of the study can be implemented in the practice of social funds and insurance companies in order to improve the quality of insurance services. Originality/value: The main contribution of this research is to transfer the processes and mechanisms for the global digital economy and global digital space formation to the social and insurance relations.peer-reviewe

Introducing willingness-to-pay for noise changes into transport appraisal: an application of benefit transfer.

Numerous research studies have elicited willingness-to-pay values for transport-related noise, however, in many industrialised countries including the UK, noise costs and benefits are still not incorporated into appraisals for most transport projects and policy changes (Odgaard et al, 2005; Grant-Muller et al, 2001). This paper describes the actions recently taken in the UK to address this issue, comprising: primary research based on the city of Birmingham; an international review of willingness-to-pay evidence; development of values using benefit transfers over time and locations; and integration with appraisal methods. Amongst the main findings are: that the willingness-to-pay estimates derived for the UK are broadly comparable with those used in appraisal elsewhere in Europe; that there is a case for a lower threshold at 1 45dB(A)Leq,18hr1 rather than the more conventional 55dB(A); and that values per dB(A) increase with the noise level above this threshold. There are significant issues over the valuation of rail versus road noise, the neglect of non-residential noise and the valuation of high noise levels in different countries. Conclusions are drawn regarding the feasibility of noise valuation based on benefit transfers in the UK and elsewhere, and future research needs in this field are discussed