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Record W1894388702 · doi:10.5282/edoc.13750

Three Essays on Commitment and Information Problems

2011· article· en· W1894388702 on OpenAlexaboutno aff
Matthias Fahn

Bibliographic record

VenueElectronic Theses of LMU Munich (Ludwig-Maximilians-Universität München) · 2011
Typearticle
Languageen
FieldDecision Sciences
TopicGame Theory and Applications
Canadian institutionsnot available
FundersDeutsche ForschungsgemeinschaftDeutscher Akademischer AustauschdienstNorthwestern University
KeywordsPsychologySociology

Abstract

fetched live from OpenAlex

papers beneted from seminar audiences in Munich, Konstanz, the 2009 Annual Confer-stay together when their match quality has become relatively bad and they would rather prefer to break up (absent divorce costs).If the gains from an increased commitment are lower than this welfare loss, a couple might abstain from getting married ex ante and rather choose to cohabit.The second chapter, Minimum Wages and Relational Contracts, develops a tractable model that shows that if agents must be motived to exert eort, various empirically observed consequences of a minimum wage can be explained.Furthermore, if relational contracts, i.e., contracts based on observable but non-veriable measures, are used and agents can be replaced, an appropriate minimum wage increases the total surplus created within an employment relationship.The driving factor behind these results is a rm's optimal choice of incentives.If rms are forced to pay a higher wage than actually intended, they will also require their employees to work harder.More precisely, a labor market with many homogenous rms and employees exists, with more employees than rms.The market is frictionless, and no (exogenous) turnover costs exist, why it is always possible for a rm to costlessly replace an agent.Furthermore, the market is not fully transparent in a sense that if turnover occurs, it is not possible to detect the reason, i.e., if an agent is red or leaves voluntarily.Thus, a rm cannot build up an external or market reputation for honoring its promises.This creates a commitment problem: Instead of making promised payments as a reward for previous eort, rms might have an incentive to renounce and replace employees.Therefore, the only way to induce agents to work is the existence of endogenous turnover costs.However, rms are also exposed to these turnover costs whenever their employees leave for exogenous reasons.Although they have all bargaining power, rms are thus not able to capture the whole surplus of an employment relationship.Then, they face a tradeo between giving high incentives (induced by high wages) and reducing turnover costs (which also increase with equilibrium wages).Even if maximum incentives are possible, employers voluntarily decrease them and enforce an eort level which is ineciently low.Forcing rms to pay a minimum wage will make it optimal for rms to let agents work harder, inducing a surplus increase.To capture employment eects as well, the model is extended accordingly.In one specication it is assumed that prots are positive.Furthermore, a rm can employ many agents.Then, employment is chosen eciently for a given level of equilibrium eort.However, since rms voluntarily decrease incentives to reduce endogenous turnover costs, Preface 4 eort and consequently also employment will be ineciently low.By increasing eort, a minimum wage thus also induces a rm to employ more agents than before.The third chapter, On the Genesis of Multinational Networks (joint with Peter Egger, Valeria Merlo, and Georg Wamser) deals with information problems.Specically, this part explores how multinational enterprises (MNEs) develop their network of foreign aliates.It is commonly observed that MNEs tend to pursue a gradual expansion strategy of their network of foreign aliates over time rather than exploring all protable opportunities simultaneously.They typically establish themselves in their home countries and then enter new foreign markets step by step.We propose a model where MNEs face uncertainty concerning their success in new markets and learn about that after entry.Conditions in dierent markets are not independent, and the information gathered in one country can also be used to learn about conditions in other, in particular, similar countries.This so-called correlated learning can explain why rms expand step by step: market entry is associated with considerable costs, and sequential investments help to economize on these costs by reducing uncertainty.The learning model developed in this paper serves to derive a number of testable hypotheses regarding market entry in general and simultaneous versus sequential market entry in specic.These hypotheses are assessed in a data-set of the universe of German MNEs and their foreign aliates.The results provide empirical evidence for correlated learning as a main driver behind international expansion strategies.1965) to 1.53 (2005-2010).During the same time period, the decrease in the US was from 3.31 to 2.07 and in Canada from 3.68 to 1.65.Source: United Nations Department of Economic and Social Aairs (2011).3 For example the birth control pill, an easier access to abortion, or the decline in infant mortality (see Doepke, 2005).

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

How this classification was reachedexpand

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.002
metaresearch head score (Gemma)0.000
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesMeta-epidemiology (narrow)
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Theoretical or conceptual · Consensus signal: Theoretical or conceptual
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.223
Threshold uncertainty score1.000

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0020.000
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0000.001
Science and technology studies0.0000.000
Scholarly communication0.0000.003
Open science0.0020.000
Research integrity0.0000.000
Insufficient payload (model declined to judge)0.0010.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.077
GPT teacher head0.278
Teacher spread0.201 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one teacher head, not a consensus.

Study designTheoretical or conceptual
Domainnot available
GenreEmpirical

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations0
Published2011
Admission routes1
Has abstractyes

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