Presentations - PhD EM - 30th cycle

26 - 27 ottobre 2016
Versione stampabile

26 October - Seminar Room, first floor, Department of Economics and Management

15.15 Ali Saral: Evolution of Cooperation in Asynchronous Prisoner’s Dilemma Game

Evolution of cooperation has been widely studied in both theoretical biology and economics literature, mostly with game theoretical tools where the actions are simultaneously taken. However, cooperative tasks in the real world often depend on asynchronous actions by different individuals.  In this study, focusing on asynchrony, we aim to provide a theoretical framework on reciprocity and investigate the evolution of response strategies in a cooperative environment. We start by defining general properties for possible response functions. Then we analyze the stability of the response strategies in a mixed population by using simulations based on prisoner’s dilemma game.

15.45

Bassim Allaheeb: The Effect of Effort in The Ultimatum Game: A Cross-Cultural Analysis
Abstract

The Ultimatum Game (UG) is a useful experimental tool for studying issues such as fairness and punishment. This study examines the impact of effort on subjects’ behavior in the UG. More precisely, it firstly analyzes the impact of proposers’ effort on the proportion of the endowment they decide to send to responders, and responders’ willingness to accept these offers after considering proposers’ efforts. Secondly, it analyzes the impact of responders’ effort on proposers’ decisions. Four experiments were run in Italy, and I will conduct the same experiments in three other countries. In the first experiment, the UG ran with the ability to choose to exert effort or not. In other words, proposers have a choice to exert or not to exert effort. Exerting effort is done by making slider-task on computers to reach a proportion they believe responders would accept. In the second experiment, proposers must exert effort to be able to offer a certain proportion. In the third experiment, responders have to exert certain amount of effort to be able to claim an amount of the proportion. Responders in the fourth experiment have an option to claim proportions without exerting effort, this experiment is used as a control for the third experiment. These experiments are used to observe to what extent hierarchy or property rights have an impact on subjects’ behavior. From the first and second experiments, responders seemed to accept offers more likely than what is in the literature. However, when responders exert effort, as in the third experiment, they significantly reject low offers more than without exerting effort. In the upcoming experiments, I will analyze subjects’ behaviour in different cultures and whether they perceive endowments as a matter either of property rights or of hierarchy.
Keywords: experimental economics; Ultimatum Game; effort; culture; hierarchy; property rights.

27 October - Laboratory 4, Doctoral School of Social Sciences

12.30 Matteo Tomaselli: Analysing Economic Growth and Debt Relationship in a Panel of European Countries

Abstract
The idea that public debt has a negative impact on economic growth has been very popular in literature, and it has been the guide towards the adoption of policies of debt reduction. Through empirical and theoretical models, many studies have attempted to provide support for this claim and for the existence of general debt thresholds above which debt would negatively affect growth. However, because of heterogeneous conditions, it is unlikely that such thresholds could be generalized to any country and any period. Going beyond the estimation of debt-thresholds, our work aims to deepen the relationship between public debt and economic growth by analysing a slightly unbalanced panel data set with 25 Western and Eastern European countries, with quarterly data from 1999Q1 to 2015Q4. After testing for unit roots, we perform a cointegration analysis both at country and panel level to understand for which countries a cointegration relationship between GDP and debt exists, and thus for which countries of our data set a long-run relationship between these variables can be described. Since the panel-level cointegration analysis does not allow us to sustain the country-level analysis, we propose a varying-effect methodology for cointegration tests on residuals. Finally, we specify a panel model to compare our groups of countries, and we decompose GDP into its main subcomponents to find out whether or not cointegration arises at the aggregate level only. Our findings show that a) a long-run relationship between public debt and GDP exists for some countries but it cannot be generalized, b) the debt-to-GDP ratio does not always correspond to this long-run relationship, and c) the short-run linkage between public debt and GDP is negative, but it is mainly determined by the events that followed the financial crisis.

Key words: Economic growth, Public debt, Cointegration analysis.

13.00 Le Manh Duc: Profit shifting by multinational firms: Evidence from Vietnam.
Abstract
This study investigates the profit-shifting activities of multinational firms out of Vietnam during the period from 2006 to 2012. Specifically, it examines how corporate income tax-rate differentials between the home country and Vietnam determine a wholly-owned subsidiary’s under-reporting of the profit obtained from an exogenous income shock. I find evidence of multinational profit shifting both through the channels of internal transfer pricing and strategic inter-subsidiary debts. Moreover, it is shown that multinational firms tend to shift more profits through strategic inter-subsidiary debts than through transfer pricing out of Vietnam. Another major finding is that firms coming from emerging Asian economies behave differently from those coming from developed OECD economies in terms of profit shifting. The higher the corporate income tax rates of the OECD home country, the more profits a wholly-owned subsidiary will report in Vietnam. In contrast, Asian firms will shift more amount of profits home, the higher the corporate income tax rates of their home country. This paper then contributes to the literature in two directions. First, it suggests that multinational firms prefer to shift profits through using debt instruments in developing economies while they prefer to use transfer pricing channel in US or Europe. Inappropriate and incomprehensive tax policy in developing countries might be the underlying reason of such difference. Second, this study shows the heterogeneity in profit-shifting behavior of multinational firms while previous studies assume that those firms are homogeneous in terms of profit shifting.
13.30 Tatiana Balmus: Trading with others' money: an experimental approach. A different incentive scheme
Abstract
In an experimental asset market setting in which participants may act both as investors or as portfolio managers, we investigate managers' behavior in response to a incentive scheme and a portfolio composition decided by the investor, as well as the effect of the endowment legitimacy on the performance fee allocated by the investor. In our treatment group, participants acting as investors are asked to exert real effort in order to earn initial endowment. Investors are then are asked to decide portfolio composition and the performance fee to allocate to the manager in case of positive profits. The portfolio is then transferred to the manager who is asked to trade (simultaneously) the two type of assets (low or high risk)  in the two experimental markets. We find that the interaction between the investor and the portfolio manager matters, and that the behavior of this last is influenced by investor's indication even if there is no interaction during market sessions. More precisely, the portfolio deviation in every trading period is positively influenced by the initial portfolio composition decided by the investor: the higher will be the share of risky assets in the portfolio composition the investor decides, the more risk the manager will take. In this context, the performance fee allocated by the investor do not play a relevant role and there is no correlation between mean portfolio deviation and the performance fee. What do play a role and drives the behavior of the portfolio managers is the treatment: in the Earned Money condition, managers alter negatively the initial portfolio composition by taking less risk, while in the House Money condition (control group), the opposite is true. On investors side, we find that participants acting as investors in the Earned Money condition decide to allocate a lower performance fee than their colleagues in the control group. 
Lunch break
15.00 Costanza Piovanelli: Wage delegation and intrinsic motivation:an experimental approach.

Abstract

The aim of this study is to investigate experimentally whether and to what extent subjects’ intrinsic motivation and performance change when they are allowed to self-set their own wage for performing a task. We propose a novel experimental design, in which the subjects are asked to perform a complex real-effort task under two different conditions: the subjects’ wages can be either chosen by the subjects themselves, or randomly determined. With this setting, we are able to disentangle intrinsic motivation from the reciprocity concerns that are likely to characterize experiments based on the standard principal-agent model. Our main preliminary result is that subjects increase their performance more when they are delegated the wage choice than when they receive a random bonus. Moreover, in the delegation treatment there seem to be an increase in intrinsic motivation.