Firm Size Distribution: Testing the "Independent Submarkets Model" in the Italian Motor Insurance Industry

This paper tests the presence of multiple independent submarkets in the Italian motor insurance industry. Independence is motivated by administrative boundaries among provinces and by further locational reasons. We find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated. These results are fully consistent with the predictions of Sutton (1998). We also show that the degree of skewness in the firms size distribution is related to characteristics such as the population living in an area, its density and the riskiness of a submarket.Size distribution of firms, independent submarkets, insurance companies

Collective Risks in Local Administrations: Can a Private Insurer Be Better than a Public Mutual Fund?

In this paper we consider the institutional arrangements needed in a decentralised framework to cope with the potential adverse welfare effects caused by localized negative shocks (e.g., natural disasters, terrorist attacks, or even clinical errors) that can be limited by precautionary investments. We model the role of a public mutual fund to cover these “collective risks”. We start from the under-investment problem stemming from the moral hazard of Local administrations when the fund is managed by the Central government, which also takes into account the equalisation of resources across administrations. We then study the potential role of private insurers in solving the under-investment problem. Our analysis shows that the public fund is always superior to the private insurance solution in the presence of hard budget constraints. However, when the Central government cannot credibly commit to an optimal transfer rule, private insurers are sometimes able to improve on the public mutual fund solution by inducing a higher level of investments.intergovernmental relations, private insurer, collective risks

Optimal risk allocation in the provision of local public services: can a private insurer be better than a public mutual fund?

In this paper we consider the institutional arrangements needed in a decentralised framework to cope with the potential adverse welfare effects caused by localized negative shocks, that impact on the provision of public services and that can be limited by precautionary investments. We model the role of a public mutual fund to cover these “collective risks”. We first study the under-investment problem stemming from the moral hazard of Local administrations, when investments are defined at the local level and are not observable by the Central government that manages the mutual fund. We then examine the potential role of private insurers in solving the underinvestment problem. Our analysis shows that the public fund is almost always superior to the private insurance solution

Impact and efficiency ranking of football managers in the Italian Serie A: sport and financial performance

The contribution of managers to the performance of football teams in the Italian Serie A is investigated. Previous results are extended by analyzing two measures of performance: the awarded points from winning matches (sport performance) and the growth of the market value of players (financial performance). Several empirical methods are employed: OLS regressions, Shorrocks-Shapley decompositions of R-squared and Data Envelopment Analysis. Our findings suggest that managers exert a significant influence on both sport and financial performances with differences between top and worst coaches. However, most of the observable characteristics in a manager’s curriculum are not significantly related to team performance

Agglomeration and the Italian North-South divide

This paper offers novel evidence on agglomeration economies by examining the link between total factor productivity (TFP) and employment density in Italy. TFP is estimated for a large sample of manufacturing firms and then aggregated at the level of Local Labor Market Areas (LLMAs). We tackle the endogeneity issues stemming from the presence of omitted co- variates and reverse causation with an instrumental variable (IV) approach that relies on histor- ical and geological data. Our estimate of the TFP elasticity with respect to the spatial concen- tration of economic activities is about 6%, a magnitude comparable to that measured for other developed countries. We find that the TFP-density nexus contributes to explaining a large share of the substantial productivity gap between the northern and southern regions of Italy. We also show that no significant heterogeneity emerges in the intensity of agglomeration economies across the country and that the positive TFP difference in favor of the firms located in the North is not due to the tougher competition taking place in those areas

Using betweenness metrics to investigate the geographical distribution of retailers

In retailing, the spatial distribution of other stores and consumers drives the location’s accessibility and attractiveness. In particular, the literature shows that a place is more attractive for retailers if the generic routes taken by consumers often cross it. However, previous studies failed to consider that there are at least two possible consumer routes: job commutes from residential to work places and shopping trips among stores. In this paper, we analyze the impact of both consumer routes on the commercial patterns in Turin. The paper demonstrates that daily commutes to workplaces do not benefit a retailer along the trip, as much as journeys for shopping purposes do. In particular, we show that the benefits that a store can have when localized on the routes depend on the kind of goods it sells. Finally, the paper shows that stores selling homogeneous products and stores selling comparable goods can differently benefit from being located in population hotspots and in commercial areas

Does player specialization predict player actions? Evidence from penalty kicks at FIFA World Cup and UEFA Euro Cup

Penalty-kicks are analysed in the literature as `real life experiments' for assessing the use of rational mixed strategies by professional players. However, each penalty kick cannot be considered a repetition of the same event because of the varying background conditions, in particular the heterogeneous ability of different players. Consequently, aggregate statistics over datasets composed of a large number of penalty kicks mediate the behaviour of the players in \emph{different} games, and the properties of optimal mixed strategies cannot be tested directly because of \emph{aggregation bias}. In this paper we model the heterogeneous ability of players. We then test the hypothesis that differently talented players randomise over different actions. To this aim, we study a dataset that collects penalties kicked during shootout series in the last editions of FIFA World-Cup and UEFA Euro-Cup (1994-2012) where kickers are categorized as specialists and non-specialists. The results support our theoretical prediction

Firm size distribution: testing the "independent submarkets model" in the Italian motor insurance industry

This paper tests the presence of multiple independent submarkets in the Italian motor insurance industry. Independence is motivated by administrative boundaries among provinces and by further locational reasons. We find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated. These results are fully consistent with the predictions of Sutton (1998). We also show that the degree of skewness in the firms size distribution is related to characteristics such as the population living in an area, its density and the riskiness of a submarket