Chow groups of weighted hypersurfaces

We extend a result of to Esnault-Levine-Viehweg concerning the Chow groups of hypersurfaces in projective space to those in weighted projective spaces

A market microstructure explanation of IPOs underpricing

In a typical IPO game with first-price auctions, we argue that risk-averse investors always underbid in equilibrium because of subjective interpretations of the firm' communication about its actual value and resulting risk aversion about the likelihood of facing investors with higher valuations. We show that the noisier the investors' inferences of the firm' value (in the sense of first-order stochastic dominance) the higher the underbidding level. Our finding is independent of winner's curse effects and possible irrationality, and allows for a testable theory.IPO underpricing; first-price auction; risk aversion; firm' communication

Employability of graduates and development of competencies: mind the gap and mind the step! Empirical evidence for Italy

education; competencies; employability

Saturation Effect and Cyclical Herd Behavior

We analyze a sequential decision model, where in every period a new agent seeks to determine the payoff of some actions. Every agent receives a possibly uninformative signal about the payoffs, and she observes previous choices. Some actions have a saturation effect; i.e., their payoffs become zero if used repeatedly too often albeit the original payoff is recovered later. We show that in every equilibrium and for almost every equilibrium play path, an action will trigger a cyclical herd behavior. We also show that the length of the transition phase between two consecutive herd behavior is at most the time needed to recover from the saturation effect. We thus give an alternative explanation to Kirman (1993) for the cyclicity of herd behavior, based on the negative externality generated by the repeated use of the same action.Herd behavior, Cycles, Saturation effects.

Psychological Aspects of Market Crashes

This paper analyzes the sensitivity of market crashes to investors'psychology in a standard general equilibrium framwork. Contrary to the traditional view that market crashes are driven by large drops in aggregate endowments, we argue from a theoretical standpoint that individual anticipations of such drops are a necessary condition for crashes to occur, and that the magnitude or such crashes are poritively correlated with the level of individual anticipations of drops

The Domain of Validity of the Put-Call Parity

We give an example where the put-call parity does not hold, and we give the domain of validity of this formulae.

Regulatory Practices and the Impossibility to Extract Truthful Risk Information

We consider a regulator providing deposit insurance to a bank with private information about its investment portfolio. Following current regulatory practices, we assume that the regulator does not commit to audit and sanction after any risk report from the bank. We show that, in absence of commitment, the socially optimal contract leads a high-risk bank to misreport its risk with positive probability in most cases. We also isolate cases when truthful risk report is optimal. We thus establish that extraction of truthful risk information is not socially optimal in most cases given current regulatory practices.Banking Regulation, Partial Commitment, Asymmetric Information, Adverse Selectio

Market Power, Survival and Accuracy of Predictions in Financial Markets

In a standard General Equilibrium framework, we consider an agent strategically using her large volume of trade to influence asset prices to increase her consumption. We show that, as in Sandroni (2000) for the competitive case, if markets are dynamically complete and some general conditions on market preferences are met then this agent' long-run consumption will vanish if she makes less accurate predictions than the market, and will maintain her market power otherwise. We thus argue that the Market Selection Hypothesis extends to this situation of market power, in contrast to Alchian (1950) and Friedman (1953) who claimed that this selection was solely driven by the competitiveness of markets.Market selection hypothesis, Market power, Survival, Assset pricing

Do Employees’ Sickness Absences React to a Change in Costs for Firms? Evidence from a Natural Experiment

We analyse the impact of a social security reform that changed the costs incurred by firms due to sickness absences. The reform abolished a compulsory insurance for firms, which insured them against the wages paid to sick blue‐collar workers. During the first year after its introduction, we estimate that the reform resulted in about 6.3 percent fewer sickness absences, and in about 8.6 percent fewer absence days. We do not find evidence for changes in hiring or firing, and we find only limited workforce composition changes. We do not find spillover effects on the absences of white‐collar workers. Robustness checks confirm these results