We model the NCAA Men's Basketball Tournament by estimating the win probabilities for each game as a function of the seeds of the two teams. Simulating other players as noise traders who pick the higher seeded team with a specified probability, we search the bracket space to find brackets that maximize the expected return and the probability of winning a prize. We find robustly across different scoring rules and payoff allocations that when playing against unsophisticated opponents, who choose the top seed with a probability of 80% or less, that the optimal brackets are "modal brackets" in which the top seed is always chosen. As opponents become more sophisticated, the environment becomes more game-theoretic and some variation from always playing the top seed may become advantageous.
Destructive Bidding in Common-Valuation, All-Pay Auctions. Samuel Raisanen, Central Michigan University
In the classic first-price all-pay auction, bidders compete for a common-value prize and every bidder pays her bid. This paper considers the case in which losing bids are paid and additionally reduce the value of the prize for the winning bidder. This set-up provides a better fit for some political contests and military conflicts as well as having applications to lobbying and R&D races. We first solve for the n-player, symmetric, mixed-strategy symmetric equilibria to the auction and compare the results to the standard all-pay auction model. We then derive conditions under which bidders will be willing to agree on a set of transfer payments to avoid participation in such an auction. This is a Pareto improvement due to the value destroyed by the bidding. Finally, we analyze bidding behavior in a two-player asymmetric auction deriving conditions under which the dominant player is willing to accept payment from the submissive player to avoid participation in the auction.
The Racial Financial Literacy Gap: Can Financial Education and Exposure Explain Differences? Jamie Weathers, Western Michigan University; Abdullah Al-Bahrani, Northern Kentucky University; Darshak Patel, University of Kentucky
We examine racial differences in financial literacy. Using NFCS data from 2015, we control for consumer characteristics, financial literacy education, and variation of financial literacy education exposure to examine whether racial differences in financial literacy persist. Our study extends the current literature and inquiries surrounding the racial wealth gap by examining the racial financial literacy gap, its determinants, and whether financial education and exposure actually help to reduce the gap. We confirm evidence that whites have higher financial literacy than non-whites and further find that the racial financial literacy gap can be reduced by not only the participation in financial literacy education but also by the source variety of the respective education. However, the benefit of participation in financial literacy education is higher for whites than non-whites. Thus, the impact of being white alone persists, indicating a racial financial literacy and/or behavioral difference despite financial literacy education.
Analysis of Supply Response to Maize Production in Nigeria. I. A. Adedeji and N. E. Tiku, Federal University
This study analysed maize supply response to price and non-price factors in Nigeria using econometric techniques. The non-price factors considered in this study are rainfall and acreage. Regression model was applied on time series data spanning from 1995 to 2013 to estimate the supply response of maize in Nigeria. To deal with the expected problems associated with time series data the study adopted several diagnostic tests. Results indicated that the relationship between the shortrun and longrun elasticity for output response, yield response, acreage response when considering the price at the longrun, it is negatively inelastic which shows that it is not price responsive. The results confirm that non-price factors seem to have more effect on maize supply in Nigeria. The study also showed that non-price factors such as rainfall and acreage have a positive impact on maize production. Given the findings, the study recommends policies that focus more on non-price factors as a means of stabilising maize production. The study also recommends that industry stakeholders and policymakers should find means to integrate the significant relationships between non-price factors and production output into future decisions and marketing policies to safeguard a healthy, growing and sustainable maize industry in Nigeria.
Trade Openness, Economic Growth and Environmental Degradation in Asian Developing Countries. Thao Duong, Kalamazoo College
Humanity faces two major challenges, economic development and environment quality. While both developed countries and developing countries have seen the environment becoming one of the most contemporary issues in the 21st century, environmental deterioration at the cost of economic growth is severe in developing countries. This study examines the effects of trade openness and economic growth on C[O.sub.2] emission using theoretical trade models. The results indicate that the increase of trade openness, including exports and imports, intensifies environmental degradation. Yet, the increase in imports resulting in the advance of the technology has a positive effect on environmental quality, implying a possible existence of the Environmental Kuznets Curve (EKC). This study further confirms these findings using panel framework based on annual data from a panel of 6 developing countries in Asia along 1986-2013. The results show that trade openness and economic growth intensify C[O.sub.2] emission. However, the study does not give support to the validity of the EKC. The findings of this study put emphasis on the need for government's intervention with stringent environmental policies such as command-and-control regulation, market-based environmental regulation, carbon tax or cap-and-trade policies with the view to reducing emission and creating sustainable development.
Urban Density, Productivity and Income: Considering the Scaled Relationship. Daniel Hummel, University of Michigan-Flint
The relationship between urban density and economic productivity is of increasing interest in the literature. This literature is increasingly focused on a scaled relationship in which it is assumed that an increase in size or density increases various economic factors. This paper considers two of these economic factors, productivity and income. The scaled relationship between population/housing density and income is confirmed in this paper, however the relationship with productivity is not confirmed in these findings. An increase in density is related to an increase in income per capita. This paper includes lessons learned for planning practice as well as directions for future research.
The Determinants of Currency Counterfeiting: The Case of State Bank Notes. Christopher Bailey, Central Michigan University
This study uses the case of US antebellum state bank notes to investigate the economic determinants of currency counterfeiting. Antebellum counterfeiting was most frequent for middle denomination bank notes and less frequent for high and low denomination bank notes. The data also reveal ceteris paribus higher counterfeiting rates for (i) bank notes from larger issuers, (ii) lower risk currencies, and (iii) bank notes from states with greater money use per capita.
Effective Teaching of Economics: A Constrained Optimization Problem? Patrik Hultberg, Kalamazoo College; David Santandreu Calonge, Canadian University Dubai
One of the fundamental tenets of economics is that decisions are often the result of optimization problems subject to resource constraints. Consumers optimize utility, subject to constraints imposed by prices and income. As economics faculty, we attempt to maximize student learning while being constrained by our own and students' limited resources. Some resources are familiar and might be under our control, such as time, class size, and access to technology. Beyond our control is an often neglected resource: our students' limited cognitive processing capacity. Ceteris paribus, how can we effectively manage the limited processing capacity of students' working memory in order to optimize long-term learning through effective instructional design.?
"Value Is in the Eye of the Beholder" and Other Lessons from the Austrian School. Peter Lochbiler, Spencer McCourt, Sarah Neal, Ellijah Pickering, Tony Sierra, Noah Stoffel, and Toby Wilson, Northwood University
This paper presents the major contributions of Menger, Wieser, Bawerk, Mises, Hayek, and other Austrian economists in understanding human action. It starts with the uniquely Austrian method of axiomatic-deductive reasoning about exchange and the impact of institutions on it. It studies individual choices based on the subjective nature of cost and utility. It describes how changes in relative market valuations act as knowledge surrogates. It focuses on the price system as a result of human actions but not of human design. It looks at markets as spontaneous orders and processes of discovery. It covers the role of private property rights and the entrepreneurial search for profit as indispensable tools for rational economic calculation. It concludes with the Austrian business cycle theory - the non-neutrality of money, the non-homogeneity of capital, and the impact of botched monetary policy on the boom and bust of America's housing market in the early 21st century.
Analyzing Viewing Patterns for Academic and Non-Academic Content Placed on Social Media. Addington Coppin, Oakland University
Viewing times over a three-year period for academic and non-academic content uploaded to YouTube show some interesting patterns, including (i) general declines in viewing times over time, and (ii) a "relative shift" toward mobile phone viewing. Explanations are offered for shorter viewing times for both the academic and non-academic video content, as well as for the "relative shift" away from computer viewing. Some implications for the future production of "academic" video content are discussed.
Historical Internal Rate of Return (HIRR)--Redefining Capital Budgeting: A Proposal. Jacob W. McCown and Randall J. Lewis, Spring Arbor University
The internal rate of return (1RR) has been in constant revision over the last century as it accounted for complex-valued IRRs, mismatching net present values (NPVs), and a more realistic modified internal rate of return (MIRR). In 2010, Carlo Alberto Magni gave mathematical credibility to a new, yet similar calculation which he named "Average Internal Rate of Return (AIRR)." The AIRR fixed various problems faced by the IRR. Nevertheless, both methods may be incomplete in that they misunderstand the possibility of the reinvestment rate their calculations are based upon. This reinvestment rate is either ambiguous (as in the case of the IRR) or tethered to a certain investment market (as in the case of the MIRR and AIRR). In other words, a company that uses subsequent capital gains to invest in new projects may find that its AIRR, MIRR, and IRR are inaccurate. Therefore, a new method is proposed called the Historical Internal Rate of Return (HIRR). HIRR calculations use an average of previous project yields as their reinvestment rates. With such a measure, a project can be understood with respect to its potential as a source of future project investments and in the context of historical project yields.
The Effect of the Bolsa Familia Program on the Brazilian Gini Coefficient Between 2003 and 2015. Marcel de Almeida Siqueira, Alma College
In 2003, Brazil's Federal Government launched an income transfer program, called Bolsa Famflia (BFP), which supports only families living in poverty (earning monthly less than R$154 per person) or extreme poverty (earning monthly less than R$77 per person). The Brazilian Gini coefficient, a statistical measure of the degree of inequality represented in a set of values in a specific time range, fell from 0.573 in 2002 to 0.491 in 2015. I analyze the Brazilian Gini coefficient before and after the launch of the BFP to compare the behavior of both groups of data. The regression lines from the data before and after the program were also compared, resulting in a regression 72% more negative after the program than before the program. Decomposing and modeling the Gini coefficient over rime we can understand more of its relationship with all other variables that may have an impact on it.
The Efficiency of Public Utility and Service Fee Determination: An Austrian Critique of Neoclassical Theory. Justin T. Austin, Ferris State University
Public Services are regarded by many as a necessity within the framework of an urban setting; the precise amount of provision and the means by which they are funded derive far less consensus. What exactly is the efficient level of provision and how much should it cost? These are two questions often asked within the realm of urban planning and public finance, each of which having innumerable justified answers. The generally accepted answers are that provision of services regarded as public should service as many as possible at the lowest possible cost, in other words the perfectly competitive equilibrium. It is supposed private markets are unable to accomplish such a feat given the nature of natural monopolies, natural monopolies being the purported alternative to the markets currently controlled by public services. Many methods for reaching, or approaching, this efficient level of public provision have been developed either from a pure theoretical perspective or from practice itself. There are; however, no efficient means by which public services may be funded, as the market is the most efficient means of resource allocation and utility maximization.
Purposive Enterprise--An Alternative to Capitalism and Socialism. Dennis Hunt, Schoolcraft College
A purposive enterprise emphasizes the product or service provided as opposed to maximizing profits. It operates where the demand curve intersects the LRAC, and costs do not include any profit. It is a free market alternative to capitalism and socialism. Hence, these economic organizations would charge lower prices and there would be more output than its competitors. Accounting for external costs, working at a job that is your passion, and paying a living wage would be additional goals of these economic organizations. As competitors are forced to follow this model in order to survive, and credit unions become the new banking norm for good and service producers, as well as individuals, the stock and credit market meltdowns that can cause recessions should go away. So, the use of fiscal and monetary policy to try to stabilize the economy would be less needed, and this source of economic downturns and inflation would be rarer. The move to purposive enterprise would not be government mandated, but would evolve as capitalism did. There should be less need for government regulation as the economic sector acts more responsibly. This is presented as an alternative to socialism and capitalism for the information age.
Latinos in Michigan: Population Growth and Labor Market Participation Trends (1980-2015)--Significance and Implications. Rene P. Rosenbaum, Leonidas Murembya, and Eric Guthrie, State of Michigan
The rapid expansion of the Latino population over the last few decades that is transforming the American economy and changing the face of the American people is affecting hundreds of metropolitan areas and small towns and rural communities in states across the United States. The Latino population in Michigan is not very large relative to the total population, and its recent population growth rate, while relatively much higher than the growth in the state's population overall, has not been as phenomenal as Latino population growth in other states. However, several factors contribute to making it more important to the state than its sheer numbers. The paper will use census data to show the patterns of population growth and labor market participation of Michigan Latinos for the state as a whole and by regions and places over the last 35 years, 1980 to 2015. The study describes these changes, their demographic and labor market impacts, and their social and policy implications.
Organ Procurement Systems and the Possibility of a Market for Human Organs. Eli Orenstein, Kalamazoo College
The shortage of transplantable organs is a pressing issue, especially in countries who outlaw market systems or enact altruistic donation systems. The failure of nonmarket systems in allocating enough organs to clear waiting lists, on which many die each day, suggests that a market system may provide a solution. This paper explores the literature surrounding organ and healthcare markets and policy. Then, using a general equilibrium model, it creates and examines a theoretical model for an organ market in a country such as the United States. The results of a free market indicate that due to several positive externalities, government intervention via subsidy would be a tool that could help correct for market failures. Ultimately, the results and discussion demonstrate that without several key aspects of perfect competition, a market for human organs is not a feasible solution due to the potentially high costs of correcting for those market failures.
Basic Life Insurance Coverage Claim Study. Paige Maiorana, Oakland University
This report was written to analyze the influence that the variables of face amount, salary, age and gender of a basic life insurance policy have on the claim amount of the plan. The data were taken from a mortality study performed by the Society of Actuaries in 2017. The data consist of 2016 basic life insurance plans collected from 81 insurance firms in the United States. A random sample of 149 coverages was taken and analyzed. After data were collected an initial model was developed. Using this model, initial estimations were performed using statistical software of Eviews. Graphical analysis was performed to determine relationships, and statistical hypothesizes were performed for significance. Only the variable of Face amount was found to be statistically significant. Error tests for endogeneity, zero conditional mean, heteroscedasticity, and normality were performed. All were violated, endogeneity and heteroscedasticity were corrected for, zero conditional mean's violation was lessened with some corrections and normality was left alone due to the use of Gauss Markov assumptions. The corrected model was re-estimated and hypothesis testing was performed again. Face amount, Male (*) age and Male (*) ln(Salary) were the only variables found to be statistically significant in relation to basic life claim amounts.
State Social Spending's Effects on ACT Test Scores. Kyle LaGore, Oakland University
This research explores the effects of state social spending, broken into three categories (education, welfare, and other), on state average ACT score in 2014. The three social spending variables were measured at a per capita level in 2010. Other independent control variables measured at a state level and collected in 2014 were included in the model to estimate state average ACT score. These variables were adult education level, poverty percentage, unemployment rate, median family income, and ACT participation rate. Through building an econometric model using OLS estimators, the variables listed above were tested for individual and joint statistical significance. After corrections to ensure estimators are BLUE, it was found that state welfare spending per capita had individual significance at a 99% confidence level, and state social spending had joint significance when estimating state average ACT score. Other significant control variables at the 99% confidence level were poverty percentage and ACT participation rate. These findings suggest that welfare spending may be more beneficial than education spending in improving standardized test scores. Further research may need to be done to determine the best way to implement spending changes and social programs to achieve maximum test scores given limited social spending funds.
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|Title Annotation:||brckets in NCAA men's basketball, bidding in all-pay auctions, financial literacy among different races|
|Date:||Sep 22, 2018|