Two-Sided Market with Spillover - Modeling a City

The paper explores the analogy between city and two-sided market. It generalizes the results on the pricing strategies of the platform in the two-sided markets for the case when concentration spillover plays an important role. The two-sided market framework is applied to model a city. The paper highlights the importance of the network effect and labor market structure for city size, governance and agglomeration formation. The cases of an isolated city and competing cities are considered.Two-sided markets; Industrial organization; Urban economics; Concentration spillover; City; Labor matching market

How to Overcome the Digital Divide? The Determinants of Internet Diffusion

We document the existence and the persistence of the digital divide and investigate the determinants of the Internet diffusion in both developing and developed countries. Our study innovates on the following: i) we use a data set that covers more countries and years than the earlier studies ii) We use the GMM estimator which requires milder assumptions to be consistent than the traditionally used panel data estimators in technology diffusion studies. We find that i) the digital divide is likely to persist over time, ii) the Internet diffusion process is dynamic which makes static estimators inconsistent, iii) Internet adoption starts later but goes faster in developing countries, iv) inflows of the foreign investment and better human capital boost the diffusion of Internet for the developing countries only and v) GDP per capita has a negative impact on Internet diffusion in the developing countries and a positive impact in developed countries. This last finding seems surprising but it is consistent with the conditional convergence hypothesis as well as with the resource curse theory.internet diffusion, digital divide, panel data, GMM

How to Overcome the Digital Divide? The Determinants of Internet Diffusion

We document the existence and the persistence of the digital divide and investigate the determinants of the Internet diffusion in both developing and developed countries. Our study innovates on the following: i) we use a data set that covers more countries and years than the earlier studies ii) We use the GMM estimator which requires milder assumptions to be consistent than the traditionally used panel data estimators in technology diffusion studies. We find that i) the digital divide is likely to persist over time, ii) the Internet diffusion process is dynamic which makes static estimators inconsistent, iii) Internet adoption starts later but goes faster in developing countries, iv) inflows of the foreign investment and better human capital boost the diffusion of Internet for the developing countries only and v) GDP per capita has a negative impact on Internet diffusion in the developing countries and a positive impact in developed countries. This last finding seems surprising but it is consistent with the conditional convergence hypothesis as well as with the resource curse theory

Geographical and temporal distribution of SARS-CoV-2 clades in the WHO European Region, January to June 2020

We show the distribution of severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) genetic clades over time and between countries and outline potential genomic surveillance objectives. We applied three genomic nomenclature systems to all sequence data from the World Health Organization European Region available until 10 July 2020. We highlight the importance of real-time sequencing and data dissemination in a pandemic situation, compare the nomenclatures and lay a foundation for future European genomic surveillance of SARS-CoV-2

Social Relations and Relational Incentives

This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find that good social relationships undermine the credibility of a threat of dismissal but strengthen the credibility of a bonus. Among others, these two mechanisms imply that better social relationships sometimes lead to higher bonuses, while worse social relationships may increase productivity and players' utility in equilibrium

Motivated Agents with Career Concerns: Signalling skills and organizational involvement

The paper studies the interaction between two kinds of incentives: career concerns and intrinsic motivation emerging from agent’s alignment with organization’s objectives or another source of organizational involve- ment. The information on both skills and involvement can be asymmetric and is updated over time, as in standard career concerns model. It is shown that career concerns is weakened for the involved agent. The agent with low involvement can be more aggressive in career and reputation building at the earlier stages of career, but will be outperformed by the more involved agent in the long-run. The results of the analysis are applied to a number of contexts.JEL classification: M52; D82; D6

The Intermediary role of microloan officers: Evidence from Ethiopia

Microfinance institutions are key financial intermediaries between donors and borrowers in developing countries. Loan officers are crucial for establishing and maintaining the relationship between borrowers and microfinance institutions. This paper studies the impact of loan officers on the loan portfolio. We use a survey and choice experiment of 800 loan officers to estimate loan officers’ preferences over loan allocation. We investigate how these preferences are affected by the organizational structure of the microfinance institution, for example, incentive provision. We pay special attention to monitoring of borrowers and loan officer discretion. The most important determinants of loan allocation are related to the financial viability of microfinance institutions rather than the pro-social mission of microfinance. We derive recommendations for the governance of microfinance institutions.JEL Classification: G21, L31, O1

Altruism and Career Concerns

The paper studies the impact of altruism on Agent’s motivation in the career concerns model. I show that career concerns incentive is lessened by altruism. As a consequence, altruism can decrease effort, though conventional wisdom suggests that effort should always be higher for the more altruistic worker. This means that not only intrinsic motivation can be crowded by extrinsic incentives; crowding effect can go in the opposite direction as well. This emphasizes a new channel of interaction between intrinsic and extrinsic motivation. The paper also studies the effect of altruism on wage. Interestingly, the model provides an example of winner’s blessing and shows that ambitions can hinder altruistic relationship. The model can be naturally applied to the workplace relationship and to the local public good provision

Contracting Under Reciprocal Altruism

I develop a model of contracting under reciprocal altruism accounting for some evidence which is paradoxical from the point of view of neoclassical models with selfish actors. My model predicts the crowding-out effect observed in the Trust Game with the possibility of a fine; for the Control Game the model predicts that an equilibrium can exhibit "no effect of control", "hidden cost of control", or "positive effect of control", depending on the characteristics of the actors, as observed in the lab. This suggests that reciprocal altruism modeling could be fruitful more generally in applications of contract theory.Reciprocal Altruism, Extrinsic and intrinsic motivation; Behavioral Economics, Signaling, Contract Theory