infonet-economy

In recent years, the World Trade Organization (WTO) has come under sustained attack from many academics and other observers. Many of the arguments employed in this attack are found in Professor Morrissey's paper and the purpose of this comment is to critically examine them. Professor Morrissey's principal argument is that the likelihood of successfully completing...

This paper intends to provide an evaluation of where the economic research on happiness stands and in which interesting directions it might develop. First, the current state of the research on happiness in economics is briefly discussed. We emphasize the potential of happiness research in testing competing theories of individual behavior. Second, the crucial issue of causality is...

We show experimentally that a principal's distrust in the voluntary performance of an agent has a negative impact on the agent's motivation to perform well. Before the agent chooses his performance, the principal in our experiment decides whether he wants to restrict the agents' choice set by implementing a minimum performance level for the agent. Since both parties...

Empirical studies on the relationship between income and happiness commonly use standard ordered response models, the most well-known representatives being the ordered logit and the ordered probit. However, these models restrict the marginal probability effects by design, and therefore limit the analysis of distributional aspects of a change in income, that is, the study of whether...

The paper proposes a simple equilibrium model of venture capital, entrepreneurship and innovation. Venture capitalists not only finance but also advise start-up entrepreneurs and thereby add value to new firms. The paper demonstrates how a productive and active VC industry boosts innovation driven growth.

A nonparametric data envelopment analysis (DEA) is performed on hospitals in the federal state of Saxony (Germany) and in Switzerland. This study is of interest from three points of view. First, contrary to most existing work, patient days are not treated as an output but as an input. Second, the usual DEA assumption of a homogeneous sample is tested and rejected for a large part of...

Insurance companies invest their wealth in financial markets. The wealth evolution strongly depends on the success of their investment strategies, but also on liquidity shocks which occur during unfavourable years, when indemnities to be paid to thenclients exceed collected premia. An investment strategy that does not take liquidity shocks into account, exposes insurance companies to...

We consider economies with additively separable utility functions and give conditions for the two-agents case under which the existencenof sunspot equilibria is equivalent to the occurrence of the transfer paradox.nThis equivalence enables us to show that sunspots cannot matter if the initial economy has a unique spot market equilibrium and there are only twoncommodities or if the...