Levels and subject

In this study, we use an experimental survey approach to if the degree of positionality is sensitive to variations in reference levels and targeted subject. Based on previous research in economics and psychology, our hypotheses are that 1) people are more positional when they choose between alternatives with relatively high consumption levels, and 2) people are more positional when they choose for a hypothetical grandchild, than for themselves. We measure positional preferences in five domains – Income, housing, vacation and SAT-score, and test our hypotheses on a large representative sample from the US (N=1300). As social demographic indicators, we include information about gender, birth year, children or grandchildren, individual income, vacation days, size of home and reported SAT-score. Our results suggest that the instruments commonly used to elicit positional preferences are relatively insensitive to variations in consumption levels and targeted subject, with a few important exceptions. First, we find that positional preferences for income and SAT scores depend on the reference level used in the hypothetical choice scenarios. Second, our results suggest that people are significantly more likely to choose the positional option for housing when they choose for a hypothetical grandchild than when they choose for themselves.

With whom, and about what, do we compare?

We use an experimental approach to test if there is a link between positional preferences and the social closeness and relevance of the reference group. More specifically, we test if people are more positional when they compare with friends and colleagues, than when they compare to an anonymous person in society. We further test if the gender of the members in the reference group is important, and if positional preferences can be linked to an individual’s social identity. To test our hypotheses, we randomize the reference groups across five unique domains – income, work performance, beauty, physical strength and social media popularity. Our results lend support to the hypothesis that social identification with a domain is correlated with positional concerns in that domain. However, in contrast to our hypotheses, we also find that a comparisons with an anonymous person in society trigger positional concerns among a significantly larger share of participants than do comparisons with friends or colleagues. Finally, our results indicate that both the gender of the participant and of the reference group has an effect on positional concerns.

Partial Information Disclosure in a Contest

Zhang and Zhou (2016) use the concept of Bayesian persuasion due to Kamenica and Gentzkow (2011) to analyze information disclosure in a contest with one-sided asymmetric information. They show that an effort-maximizing designer can manipulate information disclosure to increase expected efforts in the contest, but base their analysis upon active participation in the contest by all types of the informed player. We extend their analysis to equilibria in which some informed types exert no effort in the contest, showing how this changes the type of information disclosure that arises.

Estimating the effect of transaction costs using tick-size as a proxy

A method is proposed for estimating the effect of transaction costs on volatility, using the tick-size as proxy. The method follows three steps: 1) collect only the cases where the tick-size changes from one regime to another, 2) estimate the effect with and without the order book size, and 3) use local data on tick-size and volatility, but instruments from international markets. The first step handles stationarity and dependence. The second step is used to infer the effect of a symmetric transaction cost as tick-size is a revenue and not a cost for liquidity providers. A regression with and without the order book may therefore indicate how much this asymmetry is likely to affect the result. The third step handles endogeneity. The method is applied on intraday data from the Norwegian Stock Exchange (OSE). The results show that both the tick-size and inferred transaction costs seems to have surprisingly little impact on volatility.

Influence of Tourism Seasonality and Financial Ratios on Hotels’ Exit Risk

A large body of research has documented the impact of tourism seasonality on hotels’ operational and financial performance, further affecting hotels’ competitive advantage and survival probabilities. Several studies have included the seasonality measures in the models to evaluate hotels’ exit risk. However, the empirical findings are ambiguous, probably because the overall seasonality and different measures were used in those studies. Against this background, this study explores the impact of tourism seasonality on hotel firms’ exit risk, by controlling for financial ratios, the main factors influencing the exit risk, and using two measures of tourism seasonality by market segment, namely, the leisure, business, and conference tourism. The primary hypotheses are: (1) The different seasonal patterns of tourism demand in the market segments mitigate the impact of the overall seasonality on hotels’ exit risk, and (2) Seasonality measures of various tourism segments affect the exit risk in different manners. The case study is the Norwegian hotel industry with 4,622 hotel-years in the period between 2008 and 2018. The empirical results suggest the failure to reject the hypotheses, regardless of the measures of tourism seasonality, indicating the robustness of our findings.

Competition in primary care and prescription of antibiotics in Norway

Appropriate use of antibiotics is an important strategy to combat the problem of growing antibiotic resistance rates. In order to follow this strategy, it is important to understand the determinants of antibiotic use. We analyse the potential link between competition among general practitioners (GPs) measured with the Herfindahl-Hirshman index (HHI) and regional antibiotic consumption in Norway in 2015 and 2016. We use the data about antibiotic consumption expressed by the number of prescriptions of antibiotics for systemic use (J01) and by the number of antibiotics for respiratory tract infections (phenoxymethylpenicillin (J01CE02), doxycycline (J01AA02), amoxicillin (J01CA04) and macrolides (J01FA)) per 1000 inhabitants. We apply multiple regression analysis to the data mentioned above and control for socioeconomic characteristics of the municipalities. Our findings suggest that competition may contribute to about 37-80 additional antibiotic prescriptions per 1000 inhabitants per year and 23-46 additional prescriptions per 1000 inhabitants of antibiotics for respiratory tract infections. Moreover, our estimations suggest that antibiotic prescription is significantly related to the average number of consultations per patient, the average length of the patient list, travel time to a pharmacy, income, and the share of women.

Fatter or Fitter? On rewarding and training in a contest

Competition between heterogeneous participants often leads to low effort provision in contests. We consider a principal who can divide her fixed budget between skill-enhancing training and the contest prize. Training can reduce heterogeneity, which increases effort. But it also reduces the contest prize, which makes effort fall. We set up an incomplete-information contest with heterogeneous players and show how this trade-off is related to the size of the budget when the principal maximizes expected effort. A selection problem can also arise in this framework in which there is a cost associated with a contest win by the inferior player. This gives the principal a larger incentive to train the expected laggard, reducing the size of the prize on offer.

Competitive Balance: Information Disclosure and Discrimination in an Asymmetric Contest

We study a design problem for an effort-maximizing principal in a two-player contest with two dimensions of asymmetry. Players have different skill levels and an information gap exists, as only one player knows the skill difference. The principal has two policy instruments to redress the lack of competitive balance due to asymmetry; she can commit to an information-revealing mechanism, and she can discriminate one of the players by biasing his effort. We characterize the optimal level of discrimination to maximize aggregate effort, showing how this is in turn inextricably linked to the choice of information revelation. Applications are found in newcomer-incumbent situations in an internal labor market, sales-force management, and research contests.