infonet-economy

Property-casualty (P&C) insurers are exposed to rare but severe natural disasters. This paper analyzes the relation between catastrophe risk and the implied volatility smile of insurance stock options. We find that the slope is significantly steeper compared to non-financials and other financial institutions. We show that this effect has increased over time, suggesting a higher…

Wirtschaftsprofessor David Dorn über die Gründe für die zunehmende Lohnungleichheit in der Schweiz

We introduce a wild bootstrap algorithm for the approximation of the sampling distribution of pair or one-to-many propensity score matching estimators. Unlike the conventional iid bootstrap, the proposed wild bootstrap approach does not construct bootstrap samples by randomly resampling from the observations with uniform weights. Instead, it fixes the covariates and constructs the…

Midbrain dopamine neurons encode reward prediction errors. In this issue of Neuron, Takahashi et al. (2016) show that the ventral striatum provides dopamine neurons with prediction information specific to the timing, but not the quantity, of reward, suggesting a surprisingly nuanced neural implementation of reward prediction errors.

Increased responding to drug-associated stimuli (cue reactivity) and an inability to tolerate delayed gratification (reward impulsivity) have been implicated in the development and maintenance of drug addiction. Whereas data from animal studies suggest that both the dopamine and opioid system are involved in these two reward-related processes, their role in humans is less clear.…

Risk equalization mechanisms mitigate insurers’ incentives to practice risk selection. On the other hand, incentives to limit healthcare spending can be distorted by risk equalization, particularly when risk equalization payments depend on realized costs instead of expected costs. In addition, cost based risk equalization mechanisms may incentivize health insurers to distort the…

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