Portail HAL Paris School of Economics (PSE)
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Fiscal multipliers: A heterogenous‐agent perspective
No full textInternational audienceWe use an analytically tractable heterogeneous‐agent (HANK) version of the standard New Keynesian model to show how the size of fiscal multipliers depends on (i) the distribution of factor incomes, and (ii) the source of nominal rigidities. With sticky prices but flexible wages, the standard representative‐agent (RANK) model predicts large multipliers because profits fall after a fiscal stimulus and the resulting negative income effect makes the representative worker work harder. Our HANK model, where workers do not own stock, and thus do not receive profit income, predicts smaller fiscal multipliers. In fact, they are smaller with sticky prices than with flexible prices. When wages are the source of nominal rigidity, in contrast, fiscal multipliers are close to one, independently of income heterogeneity and price stickiness
The analogical foundations of cooperation
No full textInternational audienceWe offer an approach to cooperation in repeated games of private monitoring in which players construct models of their opponents' behavior by observing the frequencies of play in a record of past plays of the game in which actions but not signals are recorded. Players construct models of their opponent's behavior by grouping the histories in the record into a relatively small number of analogy classes for which they estimate probabilities of cooperation. The incomplete record and the limited number of analogy classes lead to misspecified models that provide the incentives to cooperate. We provide conditions for the existence of equilibria supporting cooperation and equilibria supporting high payoffs for some nontrivial analogy partitions
Going... going... wrong: a test of the level-k (and cognitive hierarchy) models of bidding behaviour
No full textIn this paper, we design and implement an experiment aimed at testing the level-k model of auctions. We begin by identifying (simple) environments that optimally disentangle the predictions of the level-k model from the natural benchmark of Bayes-Nash equilibrium. We then implement these environments within a virtual laboratory in order to see which theory can best explain observed bidding behaviour. Overall, our findings suggest that, despite its notable success in predicting behaviour in other strategic settings, the level-k model (and its close cousin, cognitive hierarchy) cannot explain behaviour in auctions
Does personality matter? Exploring its moderating role on the relationship between neighbourhood ethnic outgroup-size and preferences for Brexit
No full textInternational audiencePrior research has examined the relationship between ethnic outgroup-size at the neighbourhood level and Brexit support, yet there is a lack of understanding on the factors that moderate these effects. This paper critically extends prior debate by focusing on how personality traits moderate not only the extent to which the levels (2011) of ethnic outgroup-size in individuals’ residential neighbourhoods but also the increase thereof (2001-2011) are associated with individuals’ preferences about the 2016 Brexit referendum. Using data from Understanding Society, we find that two personality traits, agreeableness and openness, are key moderators affecting the above-mentioned relationship. High-agreeable and high-open individuals are less likely than low-agreeable and low-open individuals to support Brexit. However, while the gap between low and highly agreeable individuals shrinks as ethnic outgroup-size increases, the gap widens between those higher vs. lower in openness. Our findings highlight the multifaceted role of personality traits as a driver of heterogeneous effects on political behaviour. In sum, this paper shows that analysing the complex and intertwined nature of both contextual and individual factors is fundamental for a better understanding, not only of the Brexit referendum but, more broadly, of anti-immigrant sentiment
Economic analysis of the 12th man: should the fans be paid?
No full textInternational audienceThe paper provides a theoretical sports league model to study the pricing of tickets. It considers the trade-off between maximizing match day revenues, through high prices, and maximizing the support of the most demonstrative fans, through low prices. These spectators, the “ultras” contribute to the competitive level of the club along with team-level talent, and therefore indirectly increase the number of victories, hence the revenue from TV rights. We model the role of effusive spectators and show that, in a non-cooperative Nash equilibrium, it may be optimal for the club to subsidize their presence in order to take full advantage of the 12th man effect
No evidence of biased updating in beliefs about absolute performance: A replication and generalization of Grossman and Owens (2012)
No full textInternational audienceMany studies report that following feedback, individuals do not update their beliefs enough (a conservatism bias), and react more to good news than to bad news (an asymmetry bias), consistent with the idea of motivated beliefs. In the literature on conservatism and asymmetric updating, however, only one prior study focuses on judgments on absolute performance (Grossman & Owens, 2012), which finds that belief updating is well described by the Bayesian benchmark in that case. Here, we set out to test the replicability of these results and their robustness across several experimental manipulations, varying the uncertainty of participants’ priors, the tasks to perform, the format of beliefs and the elicitation rules used to incentivize these beliefs. We also introduce new measures of ego-relevance of these beliefs, and of the credibility of the feedback received by participants. Overall, we confirm across various experimental conditions that individuals exhibit no conservatism and asymmetry bias when they update their beliefs about their absolute performance. As in Grossman & Owens (2012), most observations are well-described by a Bayesian benchmark in our data. These results suggest a limit to the manifestation of motivated beliefs, and call for more research on the conditions under which biases in belief updating occur
Marriage payments and wives’ welfare: All you need is love
No full textInternational audienceBride price is essential to marriage in West Africa, and its impact on wives’ well-being in their marital life is a matter of debate. According to our data from Senegal, transfers to the bride’s family characterize approximately 85% of marriages. Furthermore, although this is largely ignored in the literature, these marriages are also characterized by the simultaneous existence of other marriage payments, which flow in different directions between the stakeholders. This paper studies the relationship between these multiple marriage payments and the well-being of the wife in her household. We use a unique survey that asks separate questions about the different types of marriage payments. We highlight the strength of the link between what is given to the bride herself and her welfare, as opposed to the looseness of the relation between this welfare and what is given to her family
The Employment of Older Workers
No full textInternational audienceThe participation of older workers in the labor market has increased in most high-income countries since the mid-1990s. This can be explained by changes in the characteristics of recent generations of older workers. The labor supply is healthier and better trained and includes more women. This can also be explained by reforms of retirement systems and of health and unemployment insurance systems, even if modifications may still be required to guarantee sustainability. In addition, recurring concerns about the productivity of older workers and their ability to adapt to technological change seem unfounded and likely to stem from prejudice against them. Finally, the promises associated with greater flexibility in working conditions have not, to date, led to a significant increase in the work of older individuals
Intra-household resource allocation: Marriage and women’s strategies
No full textInternational audienceMicro-economists are ill-equipped to analyze the behaviour of complex households. This paper advocates the construction of new theoretical and empirical tools and illustrates the benefits of adequately designed survey instruments in the case of Senegal