Tag Archives: seminars

Vertical Foreclosure and Risk Aversion, from Hansen and Motta

I swear it is the last time for me to go to the seminars and write posts before the final exams. Eh... But I cannot stop myself from going to this talk: first, it is from my dear micro teacher Hansen; second, it is somehow related to behavioral economics... So how can I keep on staying in my room?

As before, here is the basic information:

Vertical Foreclosure and Risk Aversion
Massimo Motta and Stephen Hansen (UPF and Barcelona GSE)
UPF Micro and Behavior Economics Seminar

Apparently, the topic was related to vertical foreclosure and risk aversion.  In his model the influence of risk aversion behaviors on principal's optimal contract choice has been considered. Although he only used typical P-A model and profit-max, the results turn to be really beautiful, especially when he generalizes the number of firms to a bigger size, and infinite.

The only thing I can think of is that if there is additional management/transaction cost when N goes lager, will there be an optimal size N? Although it is not the main point that he wants to stress, it is still somehow valuable to take in to account, since in the real world no body can ignore the transaction costs. But, anyway, his beautiful results are enough for me to enjoy~

Fine, I need to keep things short and efficient. After the exam, I will begin to work on my master project and read more papers. Hopefully it is possible to finish what I want to do in the final project in the next spring. Time always goes too fast...

Social learning and dynamic pricing

Ohhhhhhh, this week I was too busy to listen to the seminars. Fortunately, on Thursday I finally got a little time to audit a speech by a Chinese guy from Upenn. Haha~ It is not common to see any other Chinese here.

However, I came there because of the topic, not his name or something else. I was attracted by his title at the first glance, since I really would like to know something about social learning. That's a pretty interesting issue to talk, and requires enough mathematical skills. So....the related information first, as usual:

Dynamic Pricing in the Presence of Social Learning
Xi Weng (University of Pennsylvania)

UPF Internal Micro and Behavioral Economics Seminar

and here is the abstract attached:

This paper considers a monopolist selling a new experience good over time to many buyers.
Buyers learn from their own private experiences (individual learning) as well as by observing other buyers' experiences (social learning). Individual learning generates ex post heterogeneity, which affects the buyers' purchasing decisions and the firm's pricing strategy. When learning is through good news signals, the incentive to exploit the known buyers for the monopolist causes experimentation to be terminated too early. After the arrival of a good news signal, the price could instantaneously go down in order induce the remaining unknown buyer to experiment. When learning is through bad news signals, experimentation is effcient, since only the homogeneous unknown buyers purchase the experience good.

Enough background. I am interested in social learning because it considers a dynamic process of the production delivering process. Such as Ipod and some other fashion products sold in the market, there must be some "loyal" fans who would like to try and share their experience firstly, and then more and more potential consumers will do the purchase in turn.

Eh.... Nothing more to say? Maybe there are too many math formulas which makes me confused......Anyway, good luck, Xi!

Survival Analysis, health economics and alive economics

This post is only used to record that I have listened to this seminar:

Survival Extrapolation with applications in health economics [click here to download PDF]
Nikos Demiris (Agricultural University of Athens)
UPF Statistics and Operational Research Seminar

However, I didn't understand anything except the exponential equation. I had thought I would understand more, since I know a little about survival analysis (What I have learned on the Chinese R conference), and a little about health economics. But on the seminar I realized that it was beyond my scope of knowledge. Anyway, there were only 4 people (before I showed up), and my dear math teacher Lugosi was there! Lugosi, YOU ARE AMAZING!

Since I didn't actually benefit something from the lecture, it is impossible to leave any comments here. Therefore, I'd like to talk about something about economics. Well, I always wonder whether I can always pick up someone to go to the seminar together with me. It is not important whether you are able to understand what they are saying, but the atmosphere can help you adapt to the way that economists think in. Without doubt, there are only few people who prefer seminars to those time-consuming problem sets. Thus, the final conclusion is that I should go anywhere alone.

I have no right to force anyone to do anything. It's their own choices - and I choose seminars. Maybe it is a bad habit, since it is probable that I cannot get anything useful from a seminar. But I love the way they talk and communicate in the seminar, and I love the different stories that the researchers show in their presentations.

As what I wrote on the front page of this website (www.cloudlychen.net) -  "Love life, love economics", I always regard economics as a living object. Economics is from the real world, not the mathematical equations. Although we need math that complicated enough to describe the economic world specifically, the economics is, and will always be focusing on the real world. Apart from those who are engaging themselves into developing new mathematical methods for economics (e.g. theoretical  econometricians and mathematical economists), who want to explore the world of economics should pay attention to the real life of economics.

Fine, anyway I should judge anything. At least, for me, economics is always alive around everybody and everyday.

investment for marriage

Every Monday means a new week, but my intensive classes always start from Tuesday. Therefore, the best choice for Monday may be to go and listen to the seminars. This afternoon I listened to this presentation:

Marriage as a rat-race: Pre-marital investments and assortative matching
V. Bhaskar (UCL)
UPF Microeconomics Seminar

Well, I should admit his title really attracted me. Although I have somehow realized that marriage has something to do with investment, but due to my poor scope of knowledge, I know nothing about how to build an economic model and explain the investment behaviors that people take for marriage. His model is not complicated, but very persuasive. By assuming the "match" process with probabilities and noises, he explained how the equilibrium exists and what are  (Pareto) efficient conditions. Here it seems meaningless to put some math equations, and what has drawn my interests is that he considered a special case: the unbalanced population in China/parts of India. I was always wondering how people outside of China analyze China's problems or phenomenon. Today I got a part of answer. At least from the public statistics about Chinese population structure, there are about 50% more men than women, so the boys only have a chance (equals the female/male ratio)  to find his wife (the question here is that because of the "one-child policy" in China, when the first baby of a couple is a girl, they may choose to not  report the birth to the government so that they can try the second chance to see whether they can get a boy. Thus, I don't really believe the public data). And apparently, it influences their investment behaviors and the final efficient equilibrium conditions.

I am wondering what would happen if we consider the dynamic change of marriage market (if it can be regarded as a market match process). What may be taken into account is that not boys/men in China are intending to get married later and later, while girls usually get married at their early age. For example, some of my friends (girls) have a boyfriend 5 or even more years older than them. That is to say, if a boy cannot match a girl when he is young (20-25), he is still possible to find a wife when he becomes older and have more wealth in hand which may attract young girls. Although in the long run it is not a question, I still want to know whether this kind of "match" will have effects on boys' investment behaviors or not.

Similarly, in the labor market, if people feel hard to find a job now, they may go back to school and pursue higher degrees. What will happen if all people do this?  (just like what university graduates do in China now: they spend more time on get an admission from graduate schools with the expectation that they may find a better job with a master degree. However, will individual rationality result in group non-rationality?)

I'm looking for the full text of this paper but unfortunately it is not available online since it seems really new. Hope the author will post this paper on his websites soon, then I'll update the link here.

[Update Oct, 8] I have received the full text from Prof. Bhaskar. If anyone who is also interested, please leave a message below this post with your email address. When he puts it on his website, I'll update the link if possible.

Our results are consistent
with a reasonably large causal e§ect of attending an elite law school, but the exact size of the
premium depends varies with assumptions about the role of unobservables.