RePEc: Research Papers in Economics
Research Papers in Economics is a collaborative effort of hundreds of volunteers in many countries to enhance the dissemination of research in economics.
QuBE Working Papers
2016
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#046
Nash at Wimbledon: Evidence from Half a Million Serves
Minimax and its generalization to mixed strategy Nash equilibrium is the cornerstone of our understanding of strategic situations that require decision makers to be unpredictable. Using a dataset of nearly half a million serves from over 3000 matches, we examine whether the behavior of professional tennis players is consistent with the Minimax Hypothesis. The large number of matches in our dataset requires the development of a novel statistical test, which we show is more powerful than the tests used in prior related studies. We find that win rates conform remarkably closely to the theory for men, but conform somewhat less neatly for women. We show that the behavior in the field of more highly ranked (i.e., better) players conforms more closely to theory.
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#045
Investigating gender differences under time pressure in financial risk taking
We investigate the nature of gender differences in financial risk taking under time pressure. Motivated by the large gender imbalance on financial trading floor we investigate gender differences under pressure and whether testosterone plays a role in gender differences in risk attitude under pressure. We find that testosterone exposure affects both outcome and probability sensitivity in men. We also find that testosterone exposure makes men relatively more risk seeking and optimistic when having to make risky decision under time pressure.
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#044Download full text
- JEL-Codes:
- C71, C92, D72, D74
- Keywords:
- Shapley Value, (Non) Binding Agreement, Balance of Power, Communication
Too big to prevail: Coalition formations in the presence of a superpower
In this study we investigate the effect of players' power on the formation of coalitions to divide a prize when the assumption that coalition formation involves binding agreements on how to split the prize is relaxed. In our experimental setup with one powerful ('strong') player and three standard ('weak') players, we vary the strong players voting rights in one dimension and manipulate the timing of agreement and communication on the prize division in the other dimension (i.e., whether binding agreement on prize division and furthermore whether non-binding communication on prize-split intentions at the stage of coalition formation is available). We predict and find: first, with binding agreement, the results of the game and the players average payoff are (surprisingly closely) in line with the relative power of the players as measured by their Shapley value. Second, when binding agreement on the division of the prize is not possible at the stage of coalition formation, the strong player's likelihood to be part of the winning coalition and his average payoff stays high if he is not 'too strong' but it decreases significantly if his voting rights increase further. Third, communication at the coalition formation stage mitigates this negative effect of the absence of binding agreements for powerful players.
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#043Download full text
- Keywords:
- sports economics; professional team sports; efficiency wages
Striking strikers. A case of player mispricing in Association Football
We investigate whether variations in players' market values across positions in Association Football (soccer) reflect variations in contribution to the team on-field performance. Using data from the British Premier League, we find that the marginal effect of strikers' (and to some extent goal keepers') market value on team performance is lower than for other players. This suggests that strikers are overpriced relative to other players. The market value of these players is less related to their on-field performance than for players placed in defence or in mid-field.
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#042
The impact of endogenous occupational attainment on native-migrant wage distributions
This paper examines distributional differences in native-migrant wages when occupational attainment is treated as endogenous. We evaluate differential treatment of immigrants both within occupation and that arising from differential access to occupations. The distributional approach we employ is innovative in that it enables one to capture the interaction between changing occupational distributions and consequent changes in the level of human capital skills within occupation. Our results find strong support for the existence of discrimination in general, and employment discrimination in particular. However, the mechanisms differ across occupations giving rise to heterogeneity both across earnings distributions and occupations.
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#041Download full text
- JEL-Codes:
- D40, D82, D83
- Keywords:
- Search, location, spatial analysis
Disappointment looms around the corner: Visibility and local businesses' market power
We investigate how restaurants can use high visibility locations to charge higher prices or offer lower quality to customers who are imperfectly informed and face search costs. We use a large dataset of user reviews in 10 large cities in North America and Europe. We fi nd that prime locations in terms of visibility such as touristic locations or street intersections are associated with substantial lower customer satisfaction. This result can be explained by economic models of search. Restaurants with greater visibility face a larger number of uninformed customers and have therefore less need to rely on quality or low price to attract customers.
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#040Download full text
- JEL-Codes:
- I24, J15, J31
- Keywords:
- Immigrant assimilation, tertiary education, stochastic frontier
Does Host-Country Education Mitigate Immigrant Inefficiency? Evidence from Earnings of Australian University Graduates
transferability of skills remains a dominant argument in explaining lower earnings of immigrants. Acquisition of host-country education plays a critical role in overcoming this disadvantage. Using a stochastic frontier approach to compare earnings of native and foreign-born graduates from Australian universities, the authors evaluate the importance of host-country education in reducing earnings inefficiency of immigrants. Although immigrants are found to be initially more inefficient than natives, they assimilate towards the earnings frontier over time. Substantial variation in inefficiency and assimilation patterns exist across immigrants with differing residency status and ethnicity. Non-English background increases inefficiency for immigrants, but more so for non-residents. Consistent with the tightening of selection criteria in Australia, recent immigrant cohorts are found to be more efficient.
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#039Download full text
- JEL-Codes:
- C25; C70; C91; D63; D64
Guilt-Averse or Reciprocal? Looking at Behavioural Motivations in the Trust Game
For the trust game, recent models of belief-dependent motivations make opposite predictions regarding the correlation between back-transfers and secondorder beliefs of the trustor: While reciprocity models predict a negative correlation, guilt-aversion models predict a positive one. This paper tests the hypothesis that the inconclusive results in previous studies investigating the reaction of trustees to their beliefs are due to the fact that reciprocity and guilt-aversion are behaviorally relevant for different subgroups and that their impact cancels out in the aggregate. We find little evidence in support of this hypothesis and conclude that type heterogeneity is unlikely to explain previous results.
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#038
Do agents maximise? Risk taking on fi rst and second serves in tennis
We investigate whether expert players with high incentives are able to optimally determine their degree of risk taking in contest. We use a large dataset on tennis matches and look at players risk taking on fi rst and second serves. We isolate a speci c situation, let serves, where second serves and first serves occur in a way which is as good as random. This creates the setting of a quasi-experiment which we can use to study players' serving strategies on first and second serves in comparable serving situations. We find that players, both men and women, are able to adopt serving strategies which meet the requirements of optimality arising from simple assumptions about risk-return trade-offs in serves.
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#037Download full text
- JEL-Codes:
- A13, D72
- Keywords:
- social preferences, voting behavior, online experiment
Zoon politikon or homo oeconomicus ? How do people vote?
Why people vote and how they decide to allocate their vote is still a challenging question for economic analysis. We investigate the extent to which voting decisions are determined by political values, economic interest or even simply candidates' individual characteristics. To do so, we use a large scale online survey recording social preferences and political choices of voters for candidates in the 2007 French Presidential election. We find that political values matter but that the effect of differences in political position is much smaller than the effect of the voters' perceived economic interest. We also find that the individual characteristics of the candidates play a significant role.
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#036Download full text
- JEL-Codes:
- D02, D03, D7, H8, Z10, Z18
- Keywords:
- Social Identity, European Integration, Currency Union, Difference-in-Difference
Can a Common Currency Foster a Shared Social Identity across Different Nations? The Case of the Euro
Fostering the emergence of a "European identity" was one of the declared goals of the euro adoption. Now, years after the physical introduction of the common currency, we assess whether there has been an effect on a shared European identity. We use two different datasets in order to assess the impact of the euro adoption on the fostering of a self-declared "European Identity". We find that the effect of the euro is statistically insignificant although it is precisely estimated. This result holds important implications for European policy makers. It also sheds new light on the formation of social identities.
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#035Download full text
- JEL-Codes:
- C91; C92; D63; D64
- Keywords:
- Social Preferences; Other-Regarding Preferences; Intentions; Reciprocity; Trust Game;
Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games.
We investigate the role of intentions in two-player two-stage games. For this purpose we systematically vary the set of opportunity sets the first mover can chose from and study how the second mover reacts not only to opportunities of gains but also of losses created by the choice of the fi rst mover. We fi nd that the possibility of gains for the second mover (generosity) and the risk of losses for the first mover (vulnerability) are important drivers for second mover behavior. On the other hand, e fficiency concerns and an aversion against violating trust seem to be far less important motivations. We also find that second movers compare the actual choice of the first mover and the alternative choices that would have been available to him to allocations that involve equal material payoffs.