Now showing 1 - 10 of 14
  • Publication
    Student incentives and diversity in college admissions
    (University College Dublin. School of Economics, 2009-09) ;
    This paper examines student incentives when faced with a college admissions policy which pursues student body diversity. The effect of a diversify-conscious admissions policy critically depends on the design of the policy. If the admissions policy fails to incentivize students from a disadvantaged socioeconomic background it may lead to a deterioration in the intergroup score gap while failing to improve student body diversity in equilibrium.
      153
  • Publication
    Signal accuracy and informational cascades
    (University College Dublin. School Of Economics, 2006-11) ;
    We extend the Bikhchandani, Hirshleifer and Welch (1992) informational cascade framework to allow for asymmetric signal accuracy. Simulations demonstrate that even small departures from symmetry may lead to non-monotonic effects of signal accuracy on the likelihood of an inefficient cascade.
      188
  • Publication
    All-pay contests with constraints
    (University College Dublin. School of Economics, 2012-02) ;
    This paper provides simple closed form formulae for players’ expected payoffs in a broad class of all-pay contests where players may have constraints on their actions.
      195
  • Publication
    Equilibrium existence and expected payoffs in all-pay auctions with constraints
    (Springer, 2022-05-30) ;
    This paper introduces constraints on player choices in a broad class of all-pay auctions by allowing for upper bounds on players’ strategy sets. It proves the existence of equilibrium and derives simple closed-form formulae for players’ expected payoffs in any equilibrium. These formulae are straightforward to calculate in applications and do not require the derivation of the equilibrium or equilibria. This may be useful because: (i) In some applications players’ expected payoffs are the main item of interest. For example, one may be concerned about the effect of a policy on the market participants. In these cases the results can be used directly, bypassing the need for the full derivation of the equilibrium. (ii) In all-pay auctions, equilibrium is typically in mixed strategies. So in applications where the full characterization of the equilibrium is of interest, finding the players’ expected payoffs is a crucial first step in the derivation of the equilibrium.
      19
  • Publication
    Social learning in continuous time : when are informational cascades more likely to be inefficient?
    (University College Dublin. School Of Economics, 2006-11) ;
    In an observational learning environment rational agents may mimic the actions of the predecessors even when their own signal suggests the opposite. In case early movers’ signals happen to be incorrect society may settle on a common inefficient action, resulting in an inefficient informational cascade. This paper models observational learning in continuous time with endogenous timing of moves. This permits the analysis of comparative statics results. The effect of an increase in signal quality on the likelihood of an inefficient cascade is shown to be nonmonotonic. If agents do not have strong priors, an increase in signal quality may lead to a higher probability of inefficient herding. The analysis also suggests that markets with quick response to investment decisions, such as financial markets, may be more prone to inefficient collapses.
      250
  • Publication
    Consumption externalities, coordination and advertising
    (Centre for Economic Policy Research, 2001-06)
    The aim of this Paper is to demonstrate that advertising can have an important function in markets with consumption externalities, apart from its persuasive and informative roles. We show that advertising may function as a device to coordinate consumer expectations of the purchasing decisions of other consumers in markets with consumption externalities. The implications of advertising as a coordinating device are examined in the pricing and advertising decisions of firms interacting strategically. While, at times, the one period advertising expense can exceed the one period monopoly profit, in equilibrium consumers will pay a premium for the more heavily advertised brand.
      710
  • Publication
    Political campaign spending limits
    (University College Dublin. School of Economics, 2010-10) ;
    Political campaign spending ceilings are purported to limit the incumbent's ability to exploit his fundraising advantage. If the challenger does not have superior campaign effectiveness, in contrast to conventional wisdom, we show that the incumbent always benefits from a limit as long as he has an initial voter disposition advantage, however small and regardless of the candidates’ relative fundraising ability. If the challenger has higher campaign spending effectiveness, the effect of limits may be non-monotonic. If the incumbent enjoys a mild initial voter disposition advantage, a moderate limit benefits the challenger. Further restricting the limit favours the incumbent. Stricter limits may lead to the unintended consequence of increased expected spending.
      164
  • Publication
    Incumbent-quality advantage and counterfactual electoral stagnation in the U.S. Senate
    (University College Dublin. School of Economics, 2012-05) ; ;
    This paper presents a simple statistical exercise to provide a benchmark for the degree of electoral stagnation without direct officeholder benefits or challenger scare-off effects. Here electoral stagnation arises solely due to incumbent-quality advantage where the higher quality candidate wins the election. The simulation is calibrated using the observed drop-out rates in the U.S. Senate. From 1946 to 2010, the observed incumbent reelection rate is 81.7 percent; the benchmark with incumbent-quality advantage alone is able to generate a reelection rate of 78.2 percent. In the sub-sample from 1946 to 1978, the reelection rate from the simulation is almost identical to the observed. The rates diverge in the second part of the sub-sample from 1980 to 2010, possibly indicating an increase in electoral stagnation due to incumbency advantage arising for reasons other than incumbent-quality advantage.
      461
  • Publication
    Caps on political contributions, monetary penalties and politician preferences
    (University College Dublin. School of Economics, 2009-09-07) ;
    With politician preferences over policy outcomes, the effect of a contribution cap with monetary penalties for exceeding the cap is starkly different from the case with an indifferent politician. In contrast to Kaplan and Wettstein (AER, 2006) and Gale and Che (AER, 2006), a cap is never neutral on the expected cost of contributions nor on the policy outcome. Furthermore more restrictive caps can lead to increased aggregate contributions. When the penalty for exceeding the cap is small enough that it is impossible to suppress all contributions, the influence of money on policy is minimized with a binding but non-zero cap and maximized with no cap.
      158
  • Publication
    Coordination in markets with consumption externalities : the role of advertising and product quality
    (Centre for Economic Policy Research, 2005-07)
    This paper studies advertising in vertically differentiated product markets with positive consumption externalities. In markets with consumption externalities, the value of the product to the consumer depends on the purchasing decisions of other consumers. In such markets, we show that firms will engage in advertising competition in order to convince consumers of their popularity only as long as they produce goods of similar quality. The firm with the lower quality product will have a greater incentive to advertise. If it is not the brand to provide the greater consumption externality it will have very low market share due to its low intrinsic quality. Hence, in equilibrium, the lower quality product will often be more popular. This provides an additional explanation for the empirical observation that in some markets high quality is associated with lower levels of advertising.
      179