Risk aversion in economic transactions

Most people are risk-averse (risk-seeking) when they expect to gain (lose). Based on a generalization of ``expected utility theory'' which takes this into account, we introduce an automaton mimicking the dynamics of economic operations. Each operator is characterized by a parameter q which gauges people's attitude under risky choices; this index q is in fact the entropic one which plays a central role in nonextensive statistical mechanics. Different long term patterns of average asset redistribution are observed according to the distribution of parameter q (chosen once for ever for each operator) and the rules (e.g., the probabilities involved in the gamble and the indebtedness restrictions) governing the values that are exchanged in the transactions. Analytical and numerical results are discussed in terms of how the sensitivity to risk affects the dynamics of economic transactions.Comment: 4 PS figures, to appear in Europhys. Let

The Relative Price of Non-traded Goods in an Imperfectly Competitive Economy: Empirical Evidence for G7 Countries

In this paper, we consider the role of imperfect competition in explaining the relative price of non-traded to traded goods within the Balassa-Samuelson framework. Under imperfect competition in the two sectors, relative prices depend on both productivity differentials and mark-up differentials. We test this implication using a panel of sectors for the seven major OECD countries. The empirical evidence suggests that relative price movements are well explained by productivity and mark-up differentials. Unlike the original Balassa-Samuelson model, aggregate demand could affect the real exchange rate by changing the mark ups. The empirical results show that aggregate demand fluctuations lead to changes on the mark-ups

Education, Industrial Development and Foreign Trade in Argentina: Econometric Models and International Comparisons.

Economic policies in Argentina, during the last decades of the 20th century, have been generally focused more on monetary policies than on other questions really more related with economic development, such as expenditure on education and sustained industrial development, which unfortunately have not received enough attention. In this paper, we compare the economic development of Argentina with that of the OECD countries and Latin America, and we estimate some econometric models to relate education and foreign trade with industrial and non-industrial real Gross Domestic Product per inhabitant in Argentina during the period 1960-2000. These models show the important positive impact that human capital and industrial investment have on the development of Argentina. We suggest some changes in the economic policies priorities, for the first decade of the 21st century, in order to focus more on education and industrial development, learning from the best lessons of Ireland and other countries, to get fast increases of real Gdp per inhabitant, eradicate poverty and improve socio-economic well-being.

Searching for chemical inhomogeneities in Open Clusters: Analysis of the CN and CH Molecular Band Strengths in NGC 2158, NGC 2420, NGC 2682, NGC 7789 and Berkeley 29

Context: The total mass of a cluster, being the main parameter determining its ability to host more than one stellar generation, may constitute a threshold below which the cluster is able to form only a single stellar population. AIms: Our goal is to investigate the existence of star-to-star variations of CN and CH band strengths, related to the N and C abundances, respectively, among the stars in five open cluster (NGC 2158, NGC 2420, NGC 2682, NGC 7789 and Berkeley 29) similar to those observed in globular clusters and linked with the existence of multiple populations therein. Since these systems are less massive than globulars, our results may allow us to constrain the lower mass necessary to form more than one stellar population. Methods: We measured the strength of the CN and CH bands, which correlate with the C and N abundances, using four molecular indices in low-resolution SDSS/SEGUE spectra. Results: We found that for four of the open clusters (NGC 2158, NGC 2420, NGC 2682 and Berkeley 29) all the stars studied in each of them have similar CN and CH band strengths within the uncertainties since neither anomalous spreads nor bimodalities have been detected in their CN and CH distributions. In contrast, for NGC 7789 we found an anomalous spread in the strength of the CN molecular band at 3839 \AA which is larger than the uncertainties. However, the small number of stars studied in this cluster implies that further analysis is needed to confirm the existence of chemical inhomogeneities in this cluster.Comment: 11 pages, 9 figures, Accepted for publication in A&A, Tables 7, 8 and 9 will be publish onlin