For this next seminar only we ask you to re-arrange your schedule and join us on a Monday, for another very interesiting presentation by one of the latest additions to the Economics department!
On February 28, 2011 at 12.30 a.m. in room E Department of Economics, Noemi Pace PhD will present her work on "Non-Multiple Prior Models of Decision Making Under Ambiguity: new experimental evidence" joint work with John Hey.
Here is an abstract of her presentation:
ABSTRACT
We examine the performance of non multiple prior probability models of decision making under uncertainty/ambiguity from the perspective of their descriptive and predictive power. Focusing on the class of theories that proceed indirectly through the use of a preference functional, we try to answer the question as to whether the new generalisations of the Subjective Expected Utility (SEU) theory are significantly better than SEU. We employ an innovative experimental design which enables us to reproduce ambiguity in the laboratory in a transparent and non-probabilistic way, using a Bingo Blower (BB). We operate with a very simple experiment in which there are three possible events (the colours of the table-tennis balls in the BB). We ask subjects to allocate a given total number of tokens to the three events, given certain exchange rates between tokens and money. When we play out a particular decision problem, we draw one ball from the BB and subjects are paid in money the number of tokens that they allocated to that event multiplied by the exchange rate. In contrast with previous experiments, rather than carrying out statistical test comparing the various theories, we apply a constrained maximum likelihood procedure for the generation of maximum likelihood estimates of models with general constraints on parameters to assess which of the new generalizations of SEU has the relatively better performance.
Please remember that WISE went green, thus we kindly ask you to confirm by email your participation to the seminar in due time, in order to allow to prepare the right amount of food. Please note that lunch will take place between 12.30 and 1 pm, thus the actual presentation will start only at 1 pm, should you prefer to skip lunch!
The blog of the Wednesday Informal Seminar in Economics (WISE)
New seminar: Elisabetta Trevisan!
Here we are again, just a few hours from our first successful WISE meeting to invite you to another interesting presentation!
This time the speaker will be Elisabetta Trevisan PhD, another recent graduate from our Doctoral school, who will present Early Retirement and Financial Incentives: differences between high and low wage earners, joint work with Rob Euwals.
ABSTRACT
This paper investigates the impact of financial incentives on early retirement behaviour for high and low wage earners. Using a stylized life-cycle model we derive hypotheses on the behaviour of the two types. We use administrative data and we employ two identification strategies to test the predictions. First, we exploit exogenous variation in social security wealth over birth cohorts to investigate the effect of financial incentives on the early retirement of individuals who are eligible to the old generous early retirement scheme. Second, we employ a regression discontinuity design by comparing individuals who are eligible and
noneligible to the old generous scheme on the basis of their birth cohort. The empirical results show that low wage earners are indeed as predicted more sensitive to financial incentives.
Please remember that WISE went green, thus, we ask you to register to the meetings you wish to attend in order to prepare the correct amount of food and avoid waste!
Looking forward to seeing you at WISE!
-the WISE staff
This time the speaker will be Elisabetta Trevisan PhD, another recent graduate from our Doctoral school, who will present Early Retirement and Financial Incentives: differences between high and low wage earners, joint work with Rob Euwals.
ABSTRACT
This paper investigates the impact of financial incentives on early retirement behaviour for high and low wage earners. Using a stylized life-cycle model we derive hypotheses on the behaviour of the two types. We use administrative data and we employ two identification strategies to test the predictions. First, we exploit exogenous variation in social security wealth over birth cohorts to investigate the effect of financial incentives on the early retirement of individuals who are eligible to the old generous early retirement scheme. Second, we employ a regression discontinuity design by comparing individuals who are eligible and
noneligible to the old generous scheme on the basis of their birth cohort. The empirical results show that low wage earners are indeed as predicted more sensitive to financial incentives.
Please remember that WISE went green, thus, we ask you to register to the meetings you wish to attend in order to prepare the correct amount of food and avoid waste!
Looking forward to seeing you at WISE!
-the WISE staff
Upcoming seminar: Gloria Gardenal!
The first meeting of the WISE 2011 series will host one of our recent graduates, Gloria Gardenal, PhD.
On February 16, 2011 starting at 12.30 she will present her work on Cross-market Rebalancing and Financial Contagion in the Laboratory.
For a sneak peak of what she will present, here is the abstract of this work.
Abstract: We present an experimental study of financial contagion due to cross-market rebalancing. Subjects trade three assets with an automaton representing a fringe of noise traders. The three assets' fundamental values are independent of each other. Their payoff depends on the asset values, the prices at which they buy or sell and, moreover, on their portfolio composition. Theory predicts that when the first asset is hit by a negative shock, for portfolio rebalancing, subjects should buy in the second market and sell in the third, thus transmitting the shock from the first market to the third. The aggregate behavior that we observe in the laboratory is extremely close to that predicted by theory. Although in the experiment there is heterogeneity among subjects' behavior, the prices in the three markets are remarkably similar to those theoretically predicted.
On February 16, 2011 starting at 12.30 she will present her work on Cross-market Rebalancing and Financial Contagion in the Laboratory.
For a sneak peak of what she will present, here is the abstract of this work.
Abstract: We present an experimental study of financial contagion due to cross-market rebalancing. Subjects trade three assets with an automaton representing a fringe of noise traders. The three assets' fundamental values are independent of each other. Their payoff depends on the asset values, the prices at which they buy or sell and, moreover, on their portfolio composition. Theory predicts that when the first asset is hit by a negative shock, for portfolio rebalancing, subjects should buy in the second market and sell in the third, thus transmitting the shock from the first market to the third. The aggregate behavior that we observe in the laboratory is extremely close to that predicted by theory. Although in the experiment there is heterogeneity among subjects' behavior, the prices in the three markets are remarkably similar to those theoretically predicted.
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