Judgment Aggregation in Creative Production: Evidence from the Movie Industry

We study a novel, low-cost approach to aggregating judgment from a large number of industry experts on ideas that they encounter in their normal course of business. Our context is the movie industry, in which customer appeal is difficult to predict and investment costs are high. The Black List, an annual publication, ranks unproduced scripts based on anonymous nominations from film executives. This approach entails an inherent trade-off: Low participation costs enable high response rates, but nominations lack standard criteria, and which voters see which ideas is unobservable and influenced by various factors. Despite these challenges, we find that such aggregation is predictive: Listed scripts are substantially more likely to be released than observably similar, but unlisted, scripts, and, conditional on release and investment levels, listed scripts generate higher box-office revenues. We also find that this method mitigates entry barriers for less-experienced writers, as (i) their scripts are more likely to be listed than those by experienced writers and to rank higher if listed and (ii) within scripts by less-experienced writers, being listed is associated with a higher release rate. Yet, the gap in release probabilities relative to experienced writers remains large, even for top-ranked scripts. These results can be explained by the premise that scripts from less-experienced writers are more visible among eligible voters than scripts from experienced writers. This highlights idea visibility as an important determinant of votes and surfaces the trade-offs, as well as potential limitations, associated with such methods. This paper was accepted by Ashish Arora, entrepreneurship and innovation.

Design of Lotteries and Wait-Lists for Affordable Housing Allocation

We study a setting in which dynamically arriving items are assigned to waiting agents, who have heterogeneous values for distinct items and heterogeneous outside options. An ideal match would both target items to agents with the worst outside options and match them to items for which they have high value. Our first finding is that two common approaches—using independent lotteries for each item and using a waitlist in which agents lose priority when they reject an offer—lead to identical outcomes in equilibrium. Both approaches encourage agents to accept items that are marginal fits. We show that the quality of the match can be improved by using a common lottery for all items. If participation costs are negligible, a common lottery is equivalent to several other mechanisms, such as limiting participants to a single lottery, using a waitlist in which offers can be rejected without punishment, or using artificial currency. However, when there are many agents with low need, there is an unavoidable trade-off between matching and targeting. In this case, utilitarian welfare may be maximized by focusing on good matching (if the outside option distribution is light tailed) or good targeting (if it is heavy tailed). Using a common lottery achieves near-optimal matching, whereas introducing participation costs achieves near-optimal targeting. This paper was accepted by Charles Corbett, operations management.

Boom of road races in the Czech Republic – sport for all or luxury amusement?

Nowadays, similar to worldwide trends, running has become very popular in the Czech Republic. Since the mid of 1990s, the business sector has become very active in this area. Private companies organise many road races for the public, including participation of top level runners (i.e. Prague International Marathon). In 2016, within the framework of the international project IRNIST, we realised an empirical descriptive study of the Mattoni ½ Marathon in Ústí nad Labem, a middle size town. The IRNIST questionnaire was used. Analysing data on 491 runners (of 2,238 runners finished the race) we found that concern-ing socio-economic status of respondents, 56.9% of runners have a university education, one third advanced secondary education; and 63% earn more than the average wage. Participant were able to spend quite a lot of money for participation costs. These results raise the issue if the privatization and commercialization of running for the masses does not cause limit for sport participation for all.

Lawsuit vs amendment: Russian regions activity dynamics in using Constitutional Court appeals and legislative initiatives at federal level

Introduction: Russian regions use two mechanisms of interaction with the federal center − appeals to the Constitutional Court and legislative initiative at the federal level. Both mechanisms have important common characteristics − publicity, formal procedures with relatively low participation costs, and a common basic function - changing federal legislation. Objectives: to determine the nature of the influence of the authoritarian centralization of the 2000s on the use of these mechanisms by the regions. Methods: collection of data set on the use of interaction mechanisms, comparative analysis, correlation analysis. Results: significant differences were revealed in the general dynamics of regional activity and in the dynamics of individual regions and groups of regions; three periods in the use of these mechanisms by the regions have been identified, mid-1990s − 2005, 2005−2008 (transitional) and 2009–2019; there is a redistribution of thematically “sensitive” issues between the two mechanisms. Conclusions: authoritarian centralization influenced the use of both mechanisms by the regions: the activity on appeals to the Constitutional Court sharply decreased; this drop was partially compensated by another mechanism − the share of bills on the subject of state building increased.

On the ratifiability of efficient cartel mechanisms in first-price auctions with participation costs and information leakage

This paper addresses the ratifiability of an efficient cartel mechanism in a first-price auction. When a seller uses a first-price sealed-bid auction, the efficient all-inclusive cartel mechanism will no longer be ratifiable in the presence of both participation costs and potential information leakage. A bidder whose value is higher than a cut-off in the cartel will have an incentive to leave the cartel, thereby sending a credible signal of his high value, which discourages other bidders from participating in the seller’s auction. However, the cartel mechanism is still ratifiable where either the participation cost or information leakage is absent.

Endogenous Partial Insurance and Inequality

In this paper, we propose a model of endogenous partial insurance and we investigate its implications for macroeconomic outcomes, such as wealth inequality, asset accumulation, interest rate, and consumption smoothing. To this end, we include participation costs to state-contingent asset markets into an otherwise standard Aiyagari (1994) model. We highlight the resulting nonmonotonic relationship between wealth and insurance-market participation when insurance is costly. Poor households remain uninsured, middle-class households participate in the insurance market, whereas rich households decide to self-insure by only purchasing risk-free assets. After theoretically characterizing the endogenous partial insurance equilibrium, we quantify its effect, emphasizing the roles of a participation channel and an interest rate channel.

Linear Voting Rules

How should a society choose between two social alternatives if participation in the decision process is voluntary and costly, and monetary transfers are not feasible? Assuming symmetric independent private values, we show that it is utilitarian‐optimal to use a linear voting rule: votes get alternative‐dependent weights, and a default obtains if the weighted sum of votes stays below some threshold. Any combination of weights and threshold can be optimal. A standard quorum rule can be optimal only when it yields the same outcome as a linear rule. A linear rule is called upper linear if the default is upset at every election result that meets the threshold exactly. We develop a perturbation method to characterize equilibria of voting rules in the case of small participation costs and show that leaving participation voluntary increases welfare for any two‐sided upper linear rule that is optimal under compulsory participation.