Seeding the Herd: Pricing and Welfare Effects of Social Learning Manipulation

2021 ◽  
Author(s):  
Li Chen ◽  
Yiangos Papanastasiou
Keyword(s):  
Social Learning ◽  
Observational Learning ◽  
Operations Management ◽  
Welfare Effects ◽  
Unintended Consequences ◽  
Market Outcomes ◽  
Equilibrium Prices ◽  
Recent Emergence ◽  
Equilibrium Market ◽  
The Impact

This paper is motivated by the recent emergence of various interference tactics employed by sellers attempting to manipulate social learning. We revisit the classic model of observational social learning and extend it to allow for (i) asymmetric information on product value between the seller and the consumers and (ii) the ability of the seller to “seed” the observational learning process with a fake purchase, in an attempt to manipulate consumer beliefs. We examine the interaction between social learning manipulation and equilibrium market outcomes as well as the impact of antimanipulation measures aimed at detecting and punishing misconduct. The analysis yields three main insights. First, we show that increasing the intensity of antimanipulation measures can have unintended consequences, often inducing higher levels of manipulation as well as higher equilibrium prices. Second, we find that although measures of high intensity can completely deter misconduct, such measures do not lead to any improvement in either seller or consumer payoffs, relative to the case where no measures are present. Third, we demonstrate that in many cases, measures of intermediate intensity can leverage seller manipulation to simultaneously improve both seller and consumer payoffs. This paper was accepted by Jayashankar Swaminathan, operations management.

Impact of Qualitative Characteristics on Market Equilibrium: Simulation with Agent-Based Modeling

2017 ◽  
Vol 20 (02) ◽  
pp. 1750013
Author(s):  
Safae Badraoui ◽  
Khalid Bensaid ◽  
Ahmed Mouad El Haloui ◽  
Rajae Aboulaich
Keyword(s):  
Utility Function ◽  
Supply And Demand ◽  
Market Equilibrium ◽  
Ethical Aspect ◽  
Qualitative Characteristic ◽  
Individual Utility ◽  
Agent Based ◽  
Equilibrium Prices ◽  
Equilibrium Market ◽  
The Impact

This paper involves developing financial utility function that considers compliance to a certain qualitative characteristic and studies the impact on market equilibrium prices, should this criterion be Sharia compliance, fair-trade, environmental, social and governance principles or other ethical aspect. The goal is to show that individual utility can depend on other parameters than wealth and risk aversion, that therefore influence equilibrium market prices. This has been done by examining a possible utility function that takes into account individual sensitivity to the criterion and the intrinsic quality of compliance of this parameter. In order to prove the effectiveness of the proposed utility function, a simulation is made using agent-based approach with NetLogo platform. Upon examination of the impact of these parameters, it becomes clear that compliance to a qualitative characteristic would impact individual utility, supply and demand and result in equilibrium prices. This research highlights the importance of ethical arguments on individual decision making and how markets behave to this.

Aviation and the Microbiome

2020 ◽  
Vol 91 (8) ◽  
pp. 651-661
Author(s):  
Joshua T. Davis ◽  
Hilary A. Uyhelji
Keyword(s):  
Psychological Health ◽  
Aviation Safety ◽  
Autism Spectrum ◽  
Unintended Consequences ◽  
Microbial Colonization ◽  
Future Research ◽  
Aerospace Medicine ◽  
Medical Certification ◽  
Physical Disorders ◽  
The Impact

INTRODUCTION: Although the impact of microorganisms on their hosts has been investigated for decades, recent technological advances have permitted high-throughput studies of the collective microbial genomes colonizing a host or habitat, also known as the microbiome. This literature review presents an overview of microbiome research, with an emphasis on topics that have the potential for future applications to aviation safety. In humans, research is beginning to suggest relationships of the microbiome with physical disorders, including type 1 and type 2 diabetes mellitus, cardiovascular disease, and respiratory disease. The microbiome also has been associated with psychological health, including depression, anxiety, and the social complications that arise in autism spectrum disorders. Pharmaceuticals can alter microbiome diversity, and may lead to unintended consequences both short and long-term. As research strengthens understanding of the connections between the microbiota and human health, several potential applications for aerospace medicine and aviation safety emerge. For example, information derived from tests of the microbiota has potential future relevance for medical certification of pilots, accident investigation, and evaluation of fitness for duty in aerospace operations. Moreover, air travel may impact the microbiome of passengers and crew, including potential impacts on the spread of disease nationally and internationally. Construction, maintenance, and cleaning regimens that consider the potential for microbial colonization in airports and cabin environments may promote the health of travelers. Altogether, the mounting knowledge of microbiome effects on health presents several opportunities for future research into how and whether microbiome-based insights could be used to improve aviation safety.Davis JT, Uyhelji HA. Aviation and the microbiome. Aerosp Med Hum Perform. 2020; 91(8):651–661.

scholarly journals How Risky Is That Risk Sharing Agreement? Mean-Variance Tradeoffs and Unintended Consequences of Six Common Risk Sharing Agreements

2021 ◽  
Vol 6 (1) ◽  
pp. 238146832199040
Author(s):  
Gregory S. Zaric
Keyword(s):  
Risk Sharing ◽  
Financial Risk ◽  
Unintended Consequences ◽  
Drug Costs ◽  
New Drugs ◽  
Total Drug ◽  
Number Of Patients ◽  
Clinical Benefits ◽  
The Impact ◽  
Mean Variance

Background. Pharmaceutical risk sharing agreements (RSAs) are commonly used to manage uncertainties in costs and/or clinical benefits when new drugs are added to a formulary. However, existing mathematical models of RSAs ignore the impact of RSAs on clinical and financial risk. Methods. We develop a model in which the number of patients, total drug consumption per patient, and incremental health benefits per patient are uncertain at the time of the introduction of a new drug. We use the model to evaluate the impact of six common RSAs on total drug costs and total net monetary benefit (NMB). Results. We show that, relative to not having an RSA in place, each RSA reduces expected total drug costs and increases expected total NMB. Each RSA also improves two measures of risk by reducing the probability that total drug costs exceed any threshold and reducing the probability of obtaining negative NMB. However, the effects on variance in both NMB and total drug costs are mixed. In some cases, relative to not having an RSA in place, implementing an RSA can increase variability in total drug costs or total NMB. We also show that, for some RSAs, when their parameters are adjusted so that they have the same impact on expected total drug cost, they can be rank-ordered in terms of their impact on variance in drug costs. Conclusions. Although all RSAs reduce expected total drug costs and increase expected total NMB, some RSAs may actually have the undesirable effect of increasing risk. Payers and formulary managers should be aware of these mean-variance tradeoffs and the potentially unintended results of RSAs when designing and negotiating RSAs.

News and Idiosyncratic Volatility: The Public Information Processing Hypothesis*

2020 ◽  
Author(s):  
Robert F Engle ◽  
Martin Klint Hansen ◽  
Ahmet K Karagozoglu ◽  
Asger Lunde
Keyword(s):  
Information Processing ◽  
Public Information ◽  
Selection Procedure ◽  
Autoregressive Process ◽  
Return Volatility ◽  
Market Outcomes ◽  
The Public ◽  
Additional Information ◽  
Financial News ◽  
The Impact

Abstract Motivated by the recent availability of extensive electronic news databases and advent of new empirical methods, there has been renewed interest in investigating the impact of financial news on market outcomes for individual stocks. We develop the information processing hypothesis of return volatility to investigate the relation between firm-specific news and volatility. We propose a novel dynamic econometric specification and test it using time series regressions employing a machine learning model selection procedure. Our empirical results are based on a comprehensive dataset comprised of more than 3 million news items for a sample of 28 large U.S. companies. Our proposed econometric specification for firm-specific return volatility is a simple mixture model with two components: public information and private processing of public information. The public information processing component is defined by the contemporaneous relation with public information and volatility, while the private processing of public information component is specified as a general autoregressive process corresponding to the sequential price discovery mechanism of investors as additional information, previously not publicly available, is generated and incorporated into prices. Our results show that changes in return volatility are related to public information arrival and that including indicators of public information arrival explains on average 26% (9–65%) of changes in firm-specific return volatility.

Labour Market Returns to Graduates’ International Experience: Exploring Cross-Country Variation in Europe

2019 ◽  
Vol 35 (4) ◽  
pp. 491-505 ◽  
Author(s):  
Marita Jacob ◽  
Michael Kühhirt ◽  
Margarida Rodrigues
Keyword(s):  
Labour Market ◽  
Intercultural Competence ◽  
International Experience ◽  
Market Returns ◽  
Market Outcomes ◽  
Studying Abroad ◽  
Early Labour ◽  
Labour Market Outcomes ◽  
Graduate Unemployment ◽  
The Impact

AbstractThe potential benefits of increased international experience abound, ranging from enriching cultural understanding to an improvement of language skills and intercultural competence. At the same time, empirical evidence is mixed, particularly with regards to how well international experience translates into individual returns on the labour market. This article examines the association between studying abroad and early labour market outcomes in a comparative perspective aiming to shed light on why labour market returns differ across countries. We expect labour market returns to vary with specific country characteristics such as demand for international experience and competition among graduates at labour market entry. In our empirical analyses, we use data from 13 European countries that provide information on graduates’ early labour market outcomes. We find a large variation in the impact of studying abroad on both wages and attaining a higher service class position. Generally, the labour market returns to international experience are larger in countries in Eastern and Southern Europe with poorer university quality, higher graduate unemployment, and fewer students abroad.

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