infonet-economy

In the television show Affari Tuoi a contestant is endowed with a sealed box containing anmonetary prize between one cent and half a million euros. In the course of the show the contestant is offered to exchange her box for another sealed box with the samendistribution of possible monetary prizes inside. This offers a unique natural laboratory for testing the predictions of expected…

Distributions of assets returns exhibit a slight skewness. In this note we show that our model of endogenous price formation [Reimann 2006] creates an asymmetric return distribution if the price dynamics are a process in which consecutive trading periods are dependent from each other in the sense that opening prices equal closing prices of the former trading period. The corresponding…

Laboratory experiments are an important methodology in economics, especially in the field of behavioral economics. However, it is still debated to what extent results from laboratory experiments can be applied to field settings. One highly important question with respect to the external validity of experiments is whether the same individuals act in experiments as they wouldnin the…

An individual makes random errors when evaluating the expected utility of a risky lottery. Errors are symmetrically distributed around zero as long as an individual does not make transparentnmistakes such as choosing a risky lottery over its highest possible outcome for certain. This stochastic decision theory explains many well-known violations of expected utility theory such as the…

This study applies financial portfolio theory to determine efficient electricity-generating technology mixes for Switzerland and the United States. Expected returns are given by the (negative of the) rate of increase of power generation cost. Volatility of returns relates to the standard deviation of the cost increase associated with the portfolio, which contains Nuclear, Run of…

This paper employs recent data for Germany and a new outcome variable to assess the consequences of parental separation on the well-being of youths. In particular, it is considered how subjective well-being, elicited from an ordinal 11-point general life satisfaction question, differs between youths living in intact and non-intact families, holding many other potential determinants…

The New Institutional Economics made various contributions to the field of innovation management. Two specific areas of contribution are highlighted in this paper. The discussion of intellectual property protection starts with the classical concept of balancing the incentives to create new ideas against the benefits of society from disseminating these ideas. Whenever innovation…