Microeconomic Theory in Canada

 
 

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A website containing information about micro theory in Canada. This contains a working paper repository, linked to RePEc. Also links to the Canadian Economic Theory Conference.

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Recent Papers

  • Parametric Recovery Methods: A Comparative Experimental Study
    Halevy, Yoram, , yoram.halevy@ubc.ca
    Zrill, Lanny, , lannyzrill@gmail.com
    We propose and implement an experimental methodology for comparing the predictive success of various methods for recovering individual preferences from choice data. We apply the proposed approach to a comparison of two parametric recovery methods: Non Linear Least Squares (NLLS) and the Money Metric Index (MMI). The former is based on minimizing the distance between observed and predicted choices while the latter is based on eliminating incompatibility between the ranking information encoded in choices and the ranking induced by the parametric specification. The experiment, in the context of choice under risk, involves a two-part design where choices made by subjects in the first part are used to construct their choice sets in the second part of the experiment in order to separate the predictions of the two recovery methods. We find that the Money Metric Index predicts better than NLLS in all cases and significantly better when the recovered parameters imply non-convex preferences.
    Creation Date: 2016-01-09   Revision Date: 2016-01-09
  • Hedonic Regression Models for Tokyo Condominium Sales
    Diewert, W. Erwin, , erwin.diewert@ubc.ca
    Shimizu, Chihiro, , cshimizu@nus.edu.sg
    The paper fits a hedonic regression model to the sales of condominium units in Tokyo over the period 2000-2015. The problem is complicated by the need to decompose the selling price of a unit into a component that can be attributed to the structure area of the unit and another component that can be attributed to the unit’s share of land value. There is very little information on the value of condominium land and so this paper develops a methodology for reducing this knowledge gap. The paper extends the builder’s model which was developed in Eurostat (2013). Characteristics which prove to be important in explaining condominium prices are: the floor space area of the unit, the total land area of the building, the number of units in the building, the total number of stories in the building, the height of the sold unit, the age of the structure and the amount of excess land. The paper also derives an estimate for the annual geometric structure depreciation rate for condominiums in Tokyo.
    Creation Date: 2016-01-05   Revision Date: 2016-01-05
  • Legal Advice and Evidence with Bayesian and non-Bayesian Adjudicators
    Che, Yeon-Koo, , yc2271@columbia.edu
    Severinov, Sergei, , sseverinov@gmail.com
    We examine the effect of legal advice on the evidence that reaches the court and thernoutcome of adjudication, and highlight how the adjudicator should allocate thernburden of proof in light of these effects. rnDespite lawyers'rnexpertise in assessing the evidence, their advice is found to havernno effect on adjudication if the lawyers follow the strategies of disclosingrnall favorable evidence, irrespective of whether the adjudicator is Bayesian or rnnon-Bayesian. A lawyer's advice can influence the outcome to his client's favor,rneither if (s)he can credibly advise his client to suppress some favorable rnevidence or if legal advice is costly. The effect is socially undesirable in the rnformer case, but it is desirable in the latter case. rnWe also show that social welfare may be increased by regulating the inferencesrnthat adjudicators are allowed to make. Our results provide a general perspective rnfor understanding the role of private information and expert advice in disclosure.
    Creation Date: 2015-12-31   Revision Date: 2015-12-31
  • A comment on Non-Parametric Bounds for Non-Convex Preferences
    Halevy, Yoram, , yoram.halevy@ubc.ca
    Persitz, Dotan, , persitzd@post.tau.ac.il
    Zrill, Lanny, ,
    Given a data set of choices from linear budget sets, Varian (1982) uses revealed preference theory to construct non-parametric bounds on the indifference curve that passes through a given bundle. We claim that these bounds do not apply to non-convex preferences, and therefore may lead to erroneous welfare analysis.
    Creation Date: 2015-12-30   Revision Date: 2015-12-30
  • Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis
    Fenig, Guidon, , gfenig@gmail.com
    Gallipoli, Giovanni, , gallipol@mail.ubc.ca
    Halevy, Yoram, , yoram.halevy@ubc.ca
    We examine coordination in private provision of public goods when agents' contributions are complementary. When complementarity is sufficiently high an additional full-contribution equilibrium emerges. We experimentally investigate subjects’ behavior using a between-subject design that varies complementarity. When two equilibria exist, subjects coordinate on the full-contribution equilibrium. When complementarity is sizable but only a zero-contribution equilibrium exists, subjects persistently contribute above it. Choice and non-choice data reveal heterogeneity among subjects and two distinct types. Homo pecuniarius maximizes profits by best-responding to beliefs, while Homo behavioralis identifies this strategy but chooses to deviate from it – sacrificing pecuniary rewards to support altruism or competitivene
    Creation Date: 2015-11-15   Revision Date: 2015-11-15