172 research outputs found
Increasing optimism and demand uncertainty
By allowing the initial prior over market size to be a mixture of distributions, this paper extends the model of irreversible investment under uncertainty proposed by Rob (1991). We find that capacity expansion fuels investors' optimism. It is shown in the paper that the crash is always preceded by a boom when the initial prior is a mixture of exponential distributions.Learning Investment Uncertainty
Dynamic Incentive Contracts under Parameter Uncertainty
We analyze a long-term contracting problem involving common uncertainty about a parameter capturing the productivity of the relationship, and featuring a hidden action for the agent. We develop an approach that works for any utility function when the parameter and noise are normally distributed and when the effort and noise affect output additively. We then analytically solve for the optimal contract when the agent has exponential utility. We find that the Pareto frontier shifts out as information about the agent's quality improves. In the standard spot-market setup, by contrast, when the parameter measures the agent's "quality", the Pareto frontier shifts inwards with better information. Commitment is therefore more valuable when quality is known more precisely. Incentives then are easier to provide because the agent has less room to manipulate the beliefs of the principal. Moreover, in contrast to results under one-period commitment, wage volatility declines as experience accumulates.principal-agent model, optimal contract, learning, private information, reputation, career
Trade and Unemployment: What Do the Data Say?
This paper documents a robust empirical regularity: in the long-run, higher trade openness is causally associated to a lower structural rate of unemployment. We establish this fact using: (i) panel data from 20 OECD countries, (ii) cross-sectional data on a larger set of countries. The time structure of the panel data allows us to deal with endogeneity concerns, whereas cross-sectional data make it possible to instrument openness by its geographical component. In both setups, we carefully purge the data from business cycle effects, include a host of institutional and geographical variables, and control for within-country trade. Our main finding is robust to various definitions of unemployment rates and openness measures. The preferred specification suggests that a 10 percent increase in total trade openness reduces unemployment by about one percentage point. Moreover, we show that openness affects unemployment mainly through its effect on TFP and that labor market institutions do not appear to condition the effect of openness.international trade, real openness, unemployment, GMM models, IV estimation
Globalization and Labor Market Outcomes: Wage Bargaining, Search Frictions, and Firm Heterogeneity
We introduce search unemployment à la Pissarides into Melitz’ (2003) model of trade with heterogeneous firms. We allow wages to be individually or collectively bargained and analytically solve for the equilibrium. We find that the selection effect of trade influences labor market outcomes. Trade liberalization lowers unemployment and raises real wages as long as it improves aggregate productivity net of transport costs. We show that this condition is likely to be met by a reduction in variable trade costs or the entry of new trading countries. On the other hand, the gains from a reduction in fixed market access costs are more elusive. Calibrating the model shows that the positive impact of trade openness on employment is significant when wages are bargained at the individual level but much smaller when wages are bargained at the collective level.trade liberalization, unemployment, search model, firm heterogeneity
Trade and Unemployment: What do the data say?
This paper documents a robust empirical regularity: in the long-run, higher trade openness is causally associated to a lower structural rate of unemployment. We es- tablish this fact using: (i) panel data from 20 OECD countries, (ii) cross-sectional data on a larger set of countries. The time structure of the panel data allows to deal with endogeneity concerns, whereas cross-sectional data make it possible to instru- ment openness by its geographical component. In both setups, we carefully purge the data from business cycle effects, include a host of institutional and geographical variables, and control for within-country trade. Our main finding is robust to various definitions of unemployment rates and openness measures. The preferred specification suggests that a 10 percent increase in total trade openness reduces unemployment by about one percentage point. Moreover, we show that openness affects unemployment mainly through its effect on TFP and that labor market institutions do not appear to condition the effect of openness.international trade, real openness, unemployment, GMM models, IV esti- mation.
A framework for the comparison of different EEG acquisition solutions
The purpose of this work is to propose a framework for the benchmarking of
EEG amplifiers, headsets, and electrodes providing objective recommendation for
a given application. The framework covers: data collection paradigm, data
analysis, and statistical framework. To illustrate, data was collected from 12
different devices totaling up to 6 subjects per device. Two data acquisition
protocols were implemented: a resting-state protocol eyes-open (EO) and
eyes-closed (EC), and an Auditory Evoked Potential (AEP) protocol.
Signal-to-noise ratio (SNR) on alpha band (EO/EC) and Event Related Potential
(ERP) were extracted as objective quantification of physiologically meaningful
information. Then, visual representation, univariate statistical analysis, and
multivariate model were performed to increase results interpretability.
Objective criteria show that the spectral SNR in alpha does not provide much
discrimination between systems, suggesting that the acquisition quality might
not be of primary importance for spectral and specifically alpha-based
applications. On the contrary, AEP SNR proved much more variable stressing the
importance of the acquisition setting for ERP experiments. The multivariate
analysis identified some individuals and some systems as independent
statistically significant contributors to the SNR. It highlights the importance
of inter-individual differences in neurophysiological experiments (sample size)
and suggests some device might objectively be superior to others when it comes
to ERP recordings. However, the illustration of the proposed benchmarking
framework suffers from severe limitations including small sample size and sound
card jitter in the auditory stimulations. While these limitations hinders a
definite ranking of the evaluated hardware, we believe the proposed
benchmarking framework to be a modest yet valuable contribution to the field
Dynamic Incentive Contracts Under Parameter Uncertainty
We analyze a long-term contracting problem involving common uncertainty about a parameter capturing the productivity of the relationship, and featuring a hidden action for the agent. We develop an approach that works for any utility function when the parameter and noise are normally distributed and when the effort and noise affect output additively. We then analytically solve for the optimal contract when the agent has exponential utility. We find that the Pareto frontier shifts out as information about the agent's quality improves. In the standard spot-market setup, by contrast, when the parameter measures the agent's 'quality', the Pareto frontier shifts inwards with better information. Commitment is therefore more valuable when quality is known more precisely. Incentives then are easier to provide because the agent has less room to manipulate the beliefs of the principal. Moreover, in contrast to results under one-period commitment, wage volatility declines as experience accumulates.
Trade and unemployment : what do the data say?
This paper documents a robust empirical regularity: in the long-run, higher trade openness is causally associated to a lower structural rate of unemployment. We establish this fact using: (i) panel data from 20 OECD countries, (ii) cross-sectional data on a larger set of countries. The time structure of the panel data allows to deal with endogeneity concerns, whereas cross-sectional data make it possible to instrument openness by its geographical component. In both setups, we carefully purge the data from business cycle effects, include a host of institutional and geographical variables, and control for within-country trade. Our main finding is robust to various definitions of unemployment rates and openness measures. The preferred specification suggests that a 10 percent increase in total trade openness reduces unemployment by about one percentage point. Moreover, we show that openness affects unemployment mainly through its effect on TFP and that labor market institutions do not appear to condition the effect of openness
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