Recursos de colección

Caltech Authors (163.728 recursos)

Repository of works by Caltech published authors.

Group = Social Science Working Papers

Mostrando recursos 1 - 20 de 1.763

  1. A Testbed Experiment of a (Smart) Marked Based, Student Transportation Policy: Non Convexities, Coordination, Non Existence

    Lee, Hsing Yang; Maron, Travis; Plott, Charles R.; Seo, Han
    The paper develops and studies a decentralized mechanism for pricing and allocation challenges typically met with administrative processes. Traditional forms of markets are not used due to conditions associated with market failure, such as complex coordination problems, thin markets, non-convexities including and zero marginal cost due to lumpy transportation capacities. The mechanism rests on an assignment process that is guided by a computational process, enforces rules and channels information feedback to participants. Special, testbed experimental methods produce high levels of efficiency when confronted by individual behaviors that are consistent with traditional models of strategic behavior.

  2. Tick Size, Price Grids and Market Performance: Stable Matches as a Model of Market Dynamics and Equilibrium

    Plott, Charles R.; Roll, Richard; Seo, Han; Zhao, Hao
    This paper reports experiments motivated by ongoing controversies regarding tick size in markets. The minimum tick size in a market dictates discrete values at which bids and asks can be tendered by market participants. All transaction prices must occur at these discrete values, which are established by the rules of each exchange. The simplicity of experiments helps to distinguish among competing models of complex real-world securities markets. We observe patterns predicted by a matching (cooperative game) model. Because a price grid damages the equilibrium of the competitive model, the matching model provides predictions where the competitive model cannot; their predictions...

  3. Mimicking Portfolios

    Roll, Richard; Srivastava, Akshay
    Mimicking portfolios have many applications in the practice of finance. Here, we present a new method for constructing them. We illustrate its application by creating portfolios that mimic individual NYSE stocks. On the construction date, a mimicking portfolio exactly matches its target stock's exposures (betas) to a set of ETFs, which serve as proxies for global factors, and the portfolio has much lower idiosyncratic volatility than its target. Mimicking portfolios require only modest subsequent rebalancing in response to instabilities in target assets and assets used for portfolio construction. Although composed here exclusively of equities, mimicking portfolios show potential for mimicking...

  4. Legislative Facilitation of Government Growth: Universalism and Reciprocity Practices in Majority Rule Institutions

    Fiorina, Morris P.
    [No abstract]

  5. Fairness and efficiency for probabilistic allocations with endowments

    Echenique, Federico; Zhang, Jun
    We propose to use endowments as a policy instrument in market design, so as to ensure that agents have the right to enjoy certain resources. For example, in school choice, endowments can guarantee children a chance of admission to high-quality schools. We introduce a notion of justified envy adapted to allocation problems with endowments, and show that fairness (understood as the absence of justified envy) can be obtained together with efficiency and individual rationality.

  6. Fairness and efficiency for probabilistic allocations with endowments

    Echenique, Federico; Zhang, Jun
    We propose to use endowments as a policy instrument in market design, so as to ensure that agents have the right to enjoy certain resources. For example, in school choice, endowments can guarantee children a chance of admission to high-quality schools. We introduce a notion of justified envy adapted to allocation problems with endowments, and show that fairness (understood as the absence of justified envy) can be obtained together with efficiency and individual rationality.

  7. Fairness and efficiency for probabilistic allocations with endowments

    Echenique, Federico; Zhang, Jun; Miralles, Antonio
    We propose to use endowments as a policy instrument in market design. Endowments give agents the right to enjoy certain resources. For example in school choice, one can ensure that low-income families have a shot at high-quality schools by endowing them with a chance of admission. We introduce two new criteria in resource allocation problems with endowments. The first adapts the notion of justified envy to a model with endowments, while the second is based on market equilibrium. Using either criteria, we show that fairness (understood as the absence of justified envy, or as a market outcome) can be obtained together...

  8. Petroleum Price Controls When Information Is a Joint Product

    Isaac, R. Mark
    When price controls alter the production schedule from one crude oil property, they can indirectly alter production decisions at other properties not subject to controls, even if the two properties are not related by physical production or demand effects. This occurs if (i) the property under price controls produces information as a joint product, (ii) there is a jointness of information between the properties, and (iii) the existence of fixed costs of beginning development on the non-controlled property allows the availability of information to affect total equilibrium conditions.

  9. The Ownership and Valuation of Professional Sports Franchises

    Davis, Lance E.; Quirk, James P.
    Until the recent spate of legal and IRS trouble, professional team sports has been one of the most robust growth industries in the U. S. In 1959, there were 42 franchises in the five major sports leagues; by 1974, there were 117 franchises in eight major sports leagues. Evidence of the boom can be found in the growth in attendance and in an increase in ticket prices; in the rise in television coverage and in the dollars spent for TV rights; and in the increase in player salaries. That boom is also reflected in the prices of sports franchises—the subject...

  10. Credibility and Law Enforcement

    Reinganum, Jennifer F.; Wilde, Louis L.
    The precommitment approach to law enforcement is inappropriate as a positive theory of crime and punishment because it is inconsistent with the institutional structure of U.S. law enforcement. We develop a formal model which integrates theories of optimal sanctions, individual criminal behavior and the allocation of effort to apprehension, and imposes credibility constraints on the choice of sanction—i.e., given the severity of a crime and the individual characteristics of the criminal, the sanction imposed must be optimal from society's perspective, after the crime has been committed.

  11. Credibility and Law Enforcement

    Reinganum, Jennifer F.; Wilde, Louis L.
    The precommitment approach to law enforcement is inappropriate as a positive theory of crime and punishment because it is inconsistent with the institutional structure of U.S. law enforcement. We develop a formal model which integrates theories of optimal sanctions, individual criminal behavior and the allocation of effort to apprehension, and imposes credibility constraints on the choice of sanction—i.e., given the severity of a crime and the individual characteristics of the criminal, the sanction imposed must be optimal from society's perspective, after the crime has been committed.

  12. Microeconomics and Macropolitics: A Solution to the Kramer Problem

    Rivers, Douglas
    Estimation of economic voting models is complicated by the possibility that voters treat certain economic conditions as "politically irrelevant" and do not attribute responsibility for such conditions to the incumbent party. Kramer (1983) suggested that this phenomena could account for the discrepancy between micro survey and aggregate time-series estimates of the economic voting model. Statistical methods are developed for testing the Kramer hypothesis and applied to presidential voting data from 1956 to 1984. With proper treatment, the estimated individual level income effect based on pooled cross-sectional surveys is as large as that found in aggregate time series data, Ordinary regression...

  13. Microeconomics and Macropolitics: A Solution to the Kramer Problem

    Rivers, Douglas
    Estimation of economic voting models is complicated by the possibility that voters treat certain economic conditions as "politically irrelevant" and do not attribute responsibility for such conditions to the incumbent party. Kramer (1983) suggested that this phenomena could account for the discrepancy between micro survey and aggregate time-series estimates of the economic voting model. Statistical methods are developed for testing the Kramer hypothesis and applied to presidential voting data from 1956 to 1984. With proper treatment, the estimated individual level income effect based on pooled cross-sectional surveys is as large as that found in aggregate time series data, Ordinary regression...

  14. A dynamic school choice model

    Pereyra, Juan Sebastián
    This paper considers a real-life assignment problem faced by the Mexican Ministry of Public Education. Inspired by this situation, we introduce a dynamic school choice problem that consists in assigning positions to overlapping generations of teachers. From one period to another, agents are allowed either to retain their current position or to choose a preferred one. In this framework, a solution concept that conciliates the fairness criteria with the individual rationality condition is introduced. It is then proved that a fair matching always exists and that it can be reached by a modified version of the deferred acceptance algorithm of...

  15. A dynamic school choice model

    Pereyra, Juan Sebastián
    This paper considers a real-life assignment problem faced by the Mexican Ministry of Public Education. Inspired by this situation, we introduce a dynamic school choice problem that consists in assigning positions to overlapping generations of teachers. From one period to another, agents are allowed either to retain their current position or to choose a preferred one. In this framework, a solution concept that conciliates the fairness criteria with the individual rationality condition is introduced. It is then proved that a fair matching always exists and that it can be reached by a modified version of the deferred acceptance algorithm of...

  16. Bureaucratic (?) Failures: Causes and Cures

    Fiorina, Morris P.
    Bureaucracy is a traditional object of disparaging commentary, but in recent years it has received more than a proportionate share of popular and political criticism. Perceived problems of wasteful, unresponsive, power-hungry, and out-of-control bureaucracy have generated calls for across the board cut-backs in bureaucratic size and authority, as well as for various structural reforms designed to limit the activities of what is left after the pruning. This paper argues that much criticism of American bureaucracy is misplaced, and that attempts at structural tinkering are therefore doomed to fail. Too many critics of contemporary bureaucracy fail to understand that deeper political...

  17. Bureaucratic (?) Failures: Causes and Cures

    Fiorina, Morris P.
    Bureaucracy is a traditional object of disparaging commentary, but in recent years it has received more than a proportionate share of popular and political criticism. Perceived problems of wasteful, unresponsive, power-hungry, and out-of-control bureaucracy have generated calls for across the board cut-backs in bureaucratic size and authority, as well as for various structural reforms designed to limit the activities of what is left after the pruning. This paper argues that much criticism of American bureaucracy is misplaced, and that attempts at structural tinkering are therefore doomed to fail. Too many critics of contemporary bureaucracy fail to understand that deeper political...

  18. Ratifiable Mechanisms: Learning from Disagreement

    Cramton, Peter C.; Palfrey, Thomas R.
    In a mechanism design problem, participation constraints require that all types prefer the proposed mechanism to some status quo alternative. If the payoffs in the status quo depend on strategic actions based on the players' beliefs, then the inferences players make in the event someone objects to the proposed mechanism may alter the participation constraints. We include this possibility for learning from disagreement by modeling the mechanism design problem as a ratification game in which privately informed players simultaneously vote for or against the proposed mechanism. We develop and illustrate a new concept, ratifiability, that takes account of this inferencing...

  19. Voting on Growth Control Measures: Preferences and Strategies

    Dubin, Jeffrey A.; Kiewiet, D. Roderick; Noussair, Charles N.
    Citizens of many California cities and counties have sought to restrict the rate of population growth in their localities. In 1988, Citizens for Limited Growth used the initiative process to place a pair of growth control measures on the ballot in the City and County of San Diego, respectively. The City Council and Board of Supervisors responded by placing less stringent, competing measures on the same ballot. This paper analyzes voting data from this election to examine the nature of support for such measures. We find strong support for the hypotheses that whites, homeowners, liberal/environmentalists, and those exposed to high...

  20. Price Discovery in Financial Markets: The Case of the CAPM

    Bossaerts, Peter; Kleiman, Daniel; Plott, Charles R.
    We report on experiments of simple, repeated asset markets in two risky securities and one risk-free security, set up to test the Capital Asset Pricing Model (CAPM), which embeds the two most essential principles of modern asset pricing theory, namely, (i) financial markets equilibrate, (ii) in equilibrium, risk premia are solely determined by covariance with aggregate risk. Slow, but steady convergence towards the CAPM is discovered. The convergence process, however, halts before reaching the actual equilibrium. There is ample evidence that subjects gradually move up in mean-variance space, in accordance with the CAPM. Yet, adjustment stops as if the remaining...

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