Give it Away Now: An Explanation of the Empirical Results of the Ultimatum and Centipede Games

2017 ◽  
Author(s):  
Liam Mulligan
Keyword(s):  
Perceived Fairness ◽  
Practical Applications ◽  
Labour Relations ◽  
Empirical Results ◽  
Long Run ◽  
Making Choices ◽  
Short Run ◽  
Future Consequences ◽  
The City ◽  
Rational Players

Economics defines individual rationality as consumers making choices that maximize their utility in anticipation of the future consequences of these choices.  In theory, a consumer will take his or her income and allocate it towards purchases that maximize his or her utility given his or her stable of reasonably static preferences (in the short run) and estimated changes to preferences in the long run.  In order for an agent to maximize his or her utility, the agent must also maximize his or her income.   However, behavioural studies on human decisions in economic games (game theory) have shown that consumers do not always maximize their income.  Two games in particular (Ultimatum and Centipede) have demonstrated that seemingly rational players may not maximize income, whether for perceived fairness, justice, or punishment.  Practical applications of these results are observed in labour relations when striking unionized employees earn less with a labour stoppage than they would have if they had avoided losing time at work.  Specifically, a seven week strike in 2008 by CUPE Local 855 (Kawartha Lakes) is examined.  It is determined that all four job types in the City of Kawartha Lakes Children’s Services department lost income because of the strike.  Reasoning and empirical results from both the Ultimatum and Centipede games will be used to explain the Union’s decision to strike and to strike for as long as they did

Reducing the Impact of Unemployment through Work-Sharing: Some Industrial Relations Considerations

1983 ◽  
Vol 25 (2) ◽  
pp. 153-161 ◽  
Author(s):  
Noah M. Meltz ◽  
Frank Reid
Keyword(s):  
Local Level ◽  
Industrial Relations ◽  
National Level ◽  
Economic Benefits ◽  
Firm Level ◽  
Labour Relations ◽  
Work Sharing ◽  
Long Run ◽  
Short Run ◽  
The Impact

The Canadian Government has introduced a work-sharing program in which lay offs are avoided by reducing the work week and using unemployment insurance funds to pay workers short-time compensation. Compared to the lay-off alternative, there appear to be economic benefits to work-sharing for both management and employees. Reaction to the scheme has been generally positive at the union local level and the firm level, but it has been negative at the national level of both labour and management. These divergent views can be explained mainly as a result of short-run versus long-run perspectives. Managers at the firm level see the immediate benefit of improved labour relations and the avoidance of the costs of hiring and training replacements for laid-off workers who do not respond when recalled. The national business leaders are more concerned with work incentive and efficiency aspects of work-sharing.

The Volatility for Pre and Post Global Financial Crisis

2011 ◽  
Vol 2 (2) ◽  
pp. 82-95
Author(s):  
Shih-Yung Wei ◽  
Jack J. W. Yang ◽  
Jen-Tseng Chen ◽  
Wei-Chiang Samuelson Hong
Keyword(s):  
Hong Kong ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Asset Returns ◽  
Financial Asset ◽  
Asymmetric Volatility ◽  
Empirical Results ◽  
Long Run ◽  
Short Run ◽  
Financial Asset Returns

The asymmetric volatility, temporary volatility, and permanent volatility of financial asset returns have attracted much interest in recent years. However, a consensus has not yet been reached on the causes of them for both the stocks and markets. This paper researched asymmetric volatility and short-run and long-run volatility through global financial crisis for eight Asian markets. EGARCH and CGARCH models are employed to deal with the daily return to examine the degree of asymmetric volatility (temporary volatility and permanent volatility). The authors find that after global financial crisis asymmetric volatility is lower (expect Hong Kong), and the long-run effect is more than the short-run effect. The empirical results for the short-run show that, after global financial crisis, there is significant decreasing in China and Taiwan but not in Japan; the others are significantly increasing. For the long-run, there is significant decreasing (except Thailand and Korea).

scholarly journals Asymmetric Price Transmission of World Prices to Kenyan Tea Market

2020 ◽  
Author(s):  
Vincent Ngeno
Keyword(s):  
Price Transmission ◽  
Asymmetric Adjustment ◽  
Close Link ◽  
Empirical Results ◽  
Current Period ◽  
Long Run ◽  
Asymmetric Price Transmission ◽  
The World ◽  
Domestic Prices ◽  
Short Run

Abstract The use of asymmetrical threshold cointegration test is adopted in this study to investigate whether any significant relationship or asymmetric adjustment exists in transmission of prices between the world tea market and domestic prices in Kenya. The empirical results obtained are as follows. First, we verify a close link between the Kenya’s tea price and its international counterparts under the current period of market liberalization. Second, empirical results demonstrate that in both long run and short run, the price transmission between world tea market and Kenyan domestic market are nonlinear and asymmetric, suggesting long run and short run dynamic inefficiencies and presence of transaction costs.JEL classification: C32, Q13, Q17

scholarly journals FDI Asymmetries in Emerging Economies: The Case of Colombia

2019 ◽  
Vol 11 (8) ◽  
pp. 35
Author(s):  
Jose U. Mora ◽  
Celso J. Costa Junior
Keyword(s):  
Emerging Economies ◽  
Adjustment Costs ◽  
Nominal Wage ◽  
Real Output ◽  
Empirical Results ◽  
Capital Adjustment ◽  
Long Run ◽  
Price Rigidities ◽  
Short Run ◽  
Distribution Of Income

We build a DSGE model to study the asymmetries of FDI shocks in an economy like Colombia. Besides nominal wage and price rigidities, we use the fact that Colombia has two productive and differentiated regions, Bogota that produces more than 25% of Colombia GDP (DANE, 2016) and the rest of the country, Ricardian and non-Ricardian agents, habit formation, capital adjustment costs, and modeled an entire foreign sector. Empirical results show that even when in the long run results are not very different in terms of real output, the short run effects are asymmetric implying that a shock to FDI in the rest of the country might cause important microeconomic adjustments that could improve the distribution of income throughout the country.

scholarly journals Remittance in Niger: effects on economic growth and on migrants’ left behind

2021 ◽  
Vol 7 (1) ◽  
pp. 60-69
Author(s):  
Issoufou Oumarou
Keyword(s):  
Economic Growth ◽  
Causal Effect ◽  
Living Condition ◽  
Education Expenditure ◽  
Left Behind ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Short Run ◽  
The Republic ◽  
The City

Abstract Remittances have long been an important source of revenue for many people in the Republic of Niger. In order to fight poverty, young people choose to migrate. In 2019, a total of 293 million U.S. dollars was sent by migrants to their relatives in Niger; that is 3% of Niger Gross Domestic Product (GDP). The objective of this study is to analyze the effects of remittances on economic growth in Niger and the significance of its contribution in improving the living condition of migrants’ left behind families. The study applies a three-step econometric procedure followed by a survey on the usage of the remittances in the city of Tahoua (Republic of Niger). The study also performed some tests on the residuals for the accuracy of the prediction of the model. The empirical results showed no long run relationship between remittances, economic growth and gross fixed capital formation in Niger. However, in the short-run, the study revealed the existence of causal effect between remittances and economic growth. On the other hand, the results of the conducted survey in the city of Tahoua showed that 45.7% of the received remittance is used in food expenditure, 19.3% in education expenditure, 10.36% in health expenditure and 5.4% is allocated to house rent. The survey also revealed the importance of the remittances for the left behind. It indicates that 14% of the respondent left behind wish to see another family member engage in migration.

scholarly journals New Evidence of the Effect of Beijing’s Driving Restriction and Other Olympic-Year Policies on Air Pollution

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Zheng Liu ◽  
Haiyang Kong
Keyword(s):  
Air Pollution ◽  
Difference In Differences ◽  
Significant Drop ◽  
Chinese Cities ◽  
Driving Restrictions ◽  
Long Run ◽  
New Findings ◽  
Short Run ◽  
New Evidence ◽  
The City

AbstractSeven Chinese cities have enacted One-Weekday Limit (OWL) driving restrictions following Beijing’s implementation shortly after the Olympics in 2008. Existing literature examines the short-run effect of the OWL or the long-run effect of the Olympic-year policy package on air pollution in Beijing. Using two difference-in-differences (DD) approaches, this study compares the long-run effect of the Olympic-year policy package with the effect of the OWL. Using the city of Tianjin as a control, this study finds a significant drop in pollution due to the Olympic-year policy package. Using weekends as a control, this study finds a much smaller and less significant drop due to the OWL. These new findings suggest that compared to the OWL, other policies enforced in the Olympic year account for a greater portion of the drop.

scholarly journals The Dynamic Effects of Growth, Financial Development and Trade Openness on Tax Revenue in Malaysia

2020 ◽  
Vol 21 (1) ◽  
pp. 42-62
Author(s):  
Nanthakumar Loganathan ◽  
Norsiah Ahmad ◽  
Thirunaukarasu Subramaniam
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Trade Openness ◽  
Tax Revenue ◽  
Tax Collection ◽  
Empirical Results ◽  
Long Run ◽  
Rolling Window ◽  
Short Run ◽  
Sustainable Economic Growth

This study explores the effects of domestic financial development, growth and trade openness on tax collection for Malaysia using the ARDL and bootstrap rolling window estimates covering the period 1970-2017. The empirical results suggest that, the presence oflong-run relationship between tax revenue and per capita GDP and short-run relationship between tax collection, economic growth, financial development and trade openness. We foundthatthere is a short-run unidirectional causality running between tax collection, economic growth and financial development. This result suggests that, in the long-run, economic performance and financial development have an adverse effect on tax collection, while trade openness has no significant causality impact on tax collection in Malaysia. Based on the empirical results of the study, the country should pay more attention to enhance the effectiveness of future public expenditure programs and put more emphasisson dynamic fiscal policy targeting on tax reform and securing new sourcesof tax revenues to ensure continuous flow of long-term tax revenue coupled with sustainable economic growth, trade and financial performances in up-coming years.

scholarly journals Analyzing the Effect of Fuel Prices Increase on Travel Behavior

2019 ◽  
Vol 2 (1) ◽  
pp. 77 ◽  
Author(s):  
Mohammed Aljoufie
Keyword(s):  
Saudi Arabia ◽  
Travel Behavior ◽  
Household Survey ◽  
Fuel Prices ◽  
Jeddah City ◽  
Long Run ◽  
City Population ◽  
Before And After ◽  
Short Run ◽  
The City

Saudi Arabia has increased the prices of fuel in January 2018. The increase was unprecedented and range from 82% to 126 %.Travel behavior patterns and socio-economic characteristics are unique in Saudi Arabia. High car dependency is notable in all main Saudi cities.  This study attempts to analyze the effect of fuel prices increase on travel behavior change in the city of Jeddah, second largest city in Saudi Arbia. A household survey was conducted to collect travel patterns of Jeddah city population, before and after the increase of the fuel prices. Results indicate a significant effect of fuel prices increase on travel behavior in Jeddah. Further studies to explore other effects of fuel prices increase on travel behavior  in Jeddah are important in both short run and long run.

scholarly journals DO EUROPEAN REAL ESTATE STOCKS HEDGE INFLATION? EVIDENCE FROM DEVELOPED AND EMERGING MARKETS

2014 ◽  
Vol 18 (2) ◽  
pp. 178-197 ◽  
Author(s):  
Chyi Lin Lee ◽  
Ming-Long Lee
Keyword(s):  
Real Estate ◽  
Emerging Markets ◽  
Least Squares ◽  
Ordinary Least Squares ◽  
The Real Estate ◽  
Empirical Results ◽  
Expected Inflation ◽  
Long Run ◽  
Short Run ◽  
Inflation Hedging

This study examines the inflation-hedging properties of European real estate stocks in developed and emerging markets over 1990 to 2011. The Fama and Schwert model and a dynamic ordinary least squares (DOLS) regression were employed to study the inflation-hedging characteristics of European real estate stocks over the short run and long run. The empirical results show little inflationhedging ability of European real estate stocks over the short run. Over the long run, developed real estate stocks provide a positive inflation hedge against expected inflation, while no similar evidence is found in the emerging markets. The findings suggest that the inflation-hedging properties of real estate stocks are related to the institutional involvement in the real estate stock markets. The finding could have profound implications to institutional investors.

The Volatility for Pre and Post Global Financial Crisis

2013 ◽  
pp. 134-148 ◽  
Author(s):  
Shih-Yung Wei ◽  
Jack J. W. Yang ◽  
Jen-Tseng Chen ◽  
Wei-Chiang Hong
Keyword(s):  
Hong Kong ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Asset Returns ◽  
Financial Asset ◽  
Asymmetric Volatility ◽  
Empirical Results ◽  
Long Run ◽  
Short Run ◽  
Financial Asset Returns

The asymmetric volatility, temporary volatility, and permanent volatility of financial asset returns have attracted much interest in recent years. However, a consensus has not yet been reached on the causes of them for both the stocks and markets. This paper researched asymmetric volatility and short-run and long-run volatility through global financial crisis for eight Asian markets. EGARCH and CGARCH models are employed to deal with the daily return to examine the degree of asymmetric volatility (temporary volatility and permanent volatility). The authors find that after global financial crisis asymmetric volatility is lower (expect Hong Kong), and the long-run effect is more than the short-run effect. The empirical results for the short-run show that, after global financial crisis, there is significant decreasing in China and Taiwan but not in Japan; the others are significantly increasing. For the long-run, there is significant decreasing (except Thailand and Korea).

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