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Information and Price Dispersion: Theory and Evidence
Get PDFLimited information is the key element generating price dispersion in models of homogeneous‐goods markets. We show that the global relationship between information and price dispersion is an inverse‐U shape. We test this mechanism for the retail gasoline market using a new measure of information based on commuter data from Austria. Commuters sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers. Our empirical estimates are in line with the theoretical predictions. We also quantify how information affects average prices paid and the distribution of surplus in the gasoline market
mvord: An R Package for Fitting Multivariate Ordinal Regression Models
Get PDFThe R package mvord implements composite likelihood estimation in the class of multivariate
ordinal regression models with a multivariate probit and a multivariate logit link.
A flexible modeling framework for multiple ordinal measurements on the same subject is
set up, which takes into consideration the dependence among the multiple observations
by employing different error structures. Heterogeneity in the error structure across the
subjects can be accounted for by the package, which allows for covariate dependent error
structures. In addition, different regression coefficients and threshold parameters for each
response are supported. If a reduction of the parameter space is desired, constraints on
the threshold as well as on the regression coefficients can be specified by the user. The
proposed multivariate framework is illustrated by means of a credit risk application
Revealing the Purpose of a Stakeholder Organisation: The Case of a Public University Responding to the COVID-19 'Corona' Crisis
Get PDFIn early March 2020, Austria declared a state of emergency due to COVID-19. Social life was put on hold, public and private organisations were largely shut down, and universities had to adapt their operations. A group of WU academics investigate how one of Europe's biggest public universities in business and economics responded to the crisis and in the process rediscovered its core purpose
Measuring Monetary Policy with Residual Sign Restrictions at Known Shock Dates
Get PDFWe propose a novel identification strategy to measure monetary policy in a structural VAR. It is based exclusively on known past policy shocks, which are uncovered from high-frequency data, and does not rely on any theoretical a-priori restrictions. Our empirical analysis for the euro area reveals that interest rate decisions of the ECB surprised financial markets at least fifteen times since 1999. This information is used to restrict the sign and magnitude of the structural residuals of the policy rule equation at these shock dates accordingly. In spite of its utmost agnostic nature, this approach achieves strong identification, suggesting that unexpected ECB decisions have an immediate impact on the short-term money market rate, the narrow money stock, commodity prices, consumer prices and the Euro-Dollar exchange rate, and that real output responds gradually. Our close to assumption-free approach obtains as an outcome what traditional sign restrictions on impulse responses impose as an assumption.Series: Department of Economics Working Paper Serie
Foundations of Cryptoeconomic Systems
Get PDFBlockchain networks and similar cryptoeconomic networks are systems, specifically complex systems. They are adaptive networks with multiscale
spatio-temporal dynamics. Individual actions may be incentivized towards a collective goal with “purpose-driven” tokens. Blockchain
networks, for example, are equipped cryptoeconomic mechanisms that allow the decentralized network to simultaneously maintain a universal
state layer, support peer-to-peer settlement, and incentivize collective action. These networks represent an institutional infrastructure upon
which socioeconomic collaboration is facilitated – in the absence of intermediaries or traditional organizations. They provide a mission-critical
and safety-critical regulatory infrastructure for autonomous agents in untrusted economic networks. Their tokens provide a rich, real-time data
set reflecting all economic activities in their systems. Advances in network science and data science can thus be leveraged to design and
analyze these economic systems in a manner consistent with the best practices of modern systems engineering. Research that reflects all
aspects of these socioeconomic networks needs (i) a complex systems approach, (ii) interdisciplinary research, and (iii) a combination of
economic and engineering methods, here referred to as “economic systems engineering,” for the regulation and control of these socioeconomic
systems. This manuscript provides a conceptual framework synthesizing the research space and proceeds to outline specific research questions
and methodologies for future research in this field, applying an inductive approach based on interdisciplinary literature review and relative
contextualization of the works cited.Series: Working Paper Series / Institute for Cryptoeconomics / Interdisciplinary Researc
When do firms use one set of books in an international tax compliance game?
No full textThis study examines how a strategic tax auditor affects a multinational firm’s transfer pricing in a tax compliance game. Our model uses a divisionalized firm, in both a low-taxand a high-tax country, that decides to implement a transfer-pricing regime with either one or two sets of books. After observing its unit costs, the firm reports a compliant or non-compliant tax transfer price. In a regime with one set of books, the single transferprice coordinates the quantity decision and determines the tax payments. In a regime with two sets, different transfer prices serve those tasks. In contrast to previous studies, our analysis incorporates a strategic tax auditor, who observes the tax transfer price and decides whether to audit the firm. Real-world regulations suggest larger penalties for detected non-compliance under a two-sets-of-books transfer-pricing regime. Our analysis identifies the mixed strategy equilibria and examines how variations in the tax regulation—the tax rate difference and the penalty difference—affect the firm’s tax aggressiveness. We show that a firm acts less tax aggressively with a higher tax rate difference. Additionally, the model predicts that the firm either increases or decreases the probability of keeping one set of books for a smaller penalty difference.Series: WU International Taxation Research Paper Serie
SMART-KG: Hybrid Shipping for SPARQL Querying on the Web
Get PDFWhile Linked Data (LD) provides standards for publishing (RDF) and (SPARQL) querying Knowledge Graphs (KGs) on the Web, serving, accessing and processing such open, decentralized KGs is often practically impossible, as query timeouts on publicly available SPARQL endpoints show. Alternative solutions such as Triple Pattern Fragments (TPF) attempt to tackle the problem of availability by pushing query processing workload to the client side, but suffer from unnecessary transfer of irrelevant data on complex queries with large intermediate results. In this paper we present smart-KG, a novel approach to share the load between servers and clients, while significantly reducing data transfer volume, by combining TPF with shipping compressed KG partitions. Our evaluations show that outperforms state-of-the-art client-side solutions and increases server-side availability towards more cost-effective and balanced hosting of open and decentralized KGs.Series: Working Papers on Information Systems, Information Business and Operation
Manufacturing Management Practices in the Western Balkans
Get PDFIn this report, we investigate the quality of management practices in manufacturing plants in the Western Balkans. In particular, we focus on modern operations, quality of monitoring, target setting and talent management. Drawing on 385 survey responses from plant managers in Bosnia and Herzegovina, Croatia, North Macedonia and Serbia, we find that management practices scores are similar in all four countries. Our results also show significant variation in management scores across industries and ownership types of the plants. Furthermore, the plants owned by foreign MNCs were found to be better run than domestic plants in all types of management practices in all four countries. Trying to answer the question which MNC HQ resources significantly affect the level of management practices in their subsidiary plants, we find that the average HQ country level of management practices is positively associated with the level of management practices in their subsidiary plants. This effect is even stronger when the HQ provides written procedures and trainings to subsidiary plants to help them implement the best practices from the HQ. Finally, based on the personal interviews with managers in 28 plants, we highlight external conditions that prevent the plants from improving their management practices
Introducing an Artifact for the Assessment of Transversal Professional Competences
Get PDFThis paper departs from a project conducted with
the Trade and Craft sector of the Austrian Federal
Chamber of Economics. A design science perspective
scaffolds the development of an artifact, the net of
competences, to support the assessment of transversal
professional competences in the validation of prior
formal, non-formal and informal learning. This paper
contributes to theory by arguing for a structural
functional equivalence between a real spider-web and the
structure of the net of competences. A process perspective
shows how different stakeholders interact in the net of
competences. Specifically, we pose the research question
"How to assess transversal professional competences?".
To answer this question, we describe the design of a
self-assessment by outlining item generation, generation
of verb levels and the triangulation of items and verbs to
create nodes in the net of competences. Abstracting from
the previous, we present the algorithm on which the net
of competences is based
Time Inconsistency, Sophistication, and Commitment An Experimental Study
Get PDFWe experimentally study the relationship between time inconsistency, sophistication about time inconsistency, and self-commitment. Previous research has interpreted
demand for commitment devices as evidence for the sophistication of a time-inconsistent decision-maker. In our laboratory experiment, we attempt to measure
sophistication directly by way of a cognitive test. We then test the hypothesis that people who are both time-inconsistent and show high cognitive capacity take up commitment devices when offered in the strategic game between their current and their future self. For experimental laboratory commitment choices, we cannot
detect a moderating effect of cognition on commitment demand of time-inconsistent subjects. However, we find that the existence of time-inconsistent preferences and
sophistication (proxied by cognitive performance) can predict the demand for savings commitment in our hypothetical survey vignette question.Series: Department of Strategy and Innovation Working Paper Serie