2012

12-01. Chiapa C., y Juárez, L."The schooling repayment hypothesis for private transfers: Evidence from the PROGRESA/Oportunidades Experiment"

Resumen: This paper provides evidence on the schooling repayment motive for the private transfers that adult children give to their parents using data from the Mexican conditional cash transfer program PROGRESA/Oportunidades, which pays a transfer to parents for sending their children to school. We exploit the exogenous variation in the schooling grants received by the parental household, induced by the age of the child in 1997 and the year of treatment. Our results suggest that (i) there exists a repayment motive and (ii) that PROGRESA/Oportunidades is causing adult children to transfer less resources to their parents.


12-02. Ülkü L., "Nonmonotone Mechanism Design"

Resumen: I characterize the set of implementable allocation functions in the standard one dimensional mechanism design environment where the relationship between private information and payoffs is possibly non- monotone. The characterization is useful in two aspects. First it leads to a rather mild condition under which individual rationality follows directly from incentive compatibility. Second, it can be conveniently used to determine the implementability of allocation functions in certain novel applications. In particular I show that neither monotonicity of allocations, nor the monotone differences property on values is necessary for implementation. In an application, I study a buyer-seller relationship where the buyer’s value displays habit formation, which enters into his payoff through a commonly known parameter. Habit implies that the agent’s value is a nonmonotone function of his type and that monotone diferences condition can not be satisfied for all parameters. For a set of parameters, the seller-optimal mechanism is nonmonotone: the seller screens out low and high types.

Keywords: Implementation, Monotonicity, Monotone differences, Habits

JEL Classification: D42, D61, D82


12-03. Elbittar A., y Gomberg, A. "My friends: it would be an error to accept´: Communication and group identity in a bargaining setting"

Resumen: In this paper we introduce communication into intergroup ultimatum bargaining in a lab. The responder groups vote whether to accept the proposals with unanimity required either for acceptance or for rejection. In contrast with the no-communication results reported in our previous study (Elbittar, Gomberg and Sour 2011), the group decision rule does affect the individual voting behavior when subjects are allowed to exchange messages before voting. In fact, when acceptance is the default, subjects become substantially more likely to vote to reject an offer. As a result, the formal group decision-making rule turns out to have little impact on group decisions, which follow the behavior of the more confronational subjects, as predicted by the "group discontinuity hypothesis" of the psychological literature.

Keywords: Bargaining games, group decision making, communication and experiments.

JEL Classification Numbers: C92, D44, D82.


12-04. Iraola M., y Torres, J.P. "Liquidity Contractions and Prepayment Risk on Collateralized Asset Markets"

Resumen: This paper presents a dynamic general equilibrium model with default and collateral requirements. In contrast with previous literature, our model allows for liquidity contractions and general prepayment specications. We show that liquidity substantially aects credit and prepayment risks, and that dierent borrowers may follow dierentiated payment strategies: whereas some pay, others prepay or default. The lack of liquidity increases debtors' willingness to continue paying, even thought prepayment cost could be higher than the collateral value. This mechanism rationalizes underwater mortgages. We prove existence of equilibrium, and provide a numerical example illustrating the main determinants of optimal payment strategies.

Keywords. Collateralized Asset Markets - Liquidity Constraints - Prepayment Risk

JEL Classification. D50, D52.


12-05. Amuedo-Dorantes C., y Juárez, L. "Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 Plus Program for the Rural Elderly in Mexico"

Resumen: We estimate the crowding out of private transfers caused by 70 y Más, a public assistance program for the rural elderly in Mexico for whom private support is an important source of income. Using data from the MexicanIncome and Expenditure Survey and atriple differences approach, we find that the program partially crowds out private giftsby reducing the probability of receiving domestic remittances. As a result, the non-labor income of the program beneficiaries increases by 30 percent less thanthe expected increase in government transfers resulting from the program. Therefore, reduced domestic transfers dampen the effect of the program and, thus, the public transfer originally targeted to the elderly ends up partially benefiting their donors within Mexico, but not those abroad. Keywords: Old-age government transfers, crowding-out, remittances, Mexico. JEL categories:H2, H3, H5, I3.