2017

1. A. Nikandrova and R. Pancs, " Dynamic Project Selection", forthcoming in Theoretical Economics.

Resumen:

We study a normative model of an internal capital market, used by a company to choose between its two devisions’ pet projects. Each project’s value is initially unknown to all but can be dynamically learned by the corresponding division. Learning can be suspended or resumed at any time and is costly. We characterize an internal capital market that maximizes the company’s expected cash flow. This market has indicative bidding by the two divisions, followed by a spell of learning and then firm bidding, which occurs at an endogenous deadline or as soon as either division requests it.


2. P. Evodkimov and U.Garfagnini, " Third-party manipulation of conflict: an experiment", forthcoming in Experimental Economics.

Resumen:

We design a laboratory experiment in which an interested third party endowed with private information sends a public message to two conflicting players, who then make their choices. We find that third-party communication is not strategic. Nevertheless, a hawkish message by a third party makes hawkish behavior more likely while a dovish message makes it less likely. Moreover, how subjects respond to the message is largely unaffected by the third party’s incentives. We argue that our results are consistent with a focal point interpretation in the spirit of Schelling.


3. Da Rocha, J.M., Gutierrez, M.J., García-Cutrin, F.J. and Jardim, E., " Endogenous Fishing Mortalities: a State-Space Bioeconomic Model", forthcoming in ICES Journal of Marine Science.

Resumen:

A methodology that endogenously determines catchability functions that link fishing mortality with contemporaneous stock abundance is presented. We consider a stochastic age-structured model for a fishery composed by a number of fishing units (fleets, vessels or metiers) that optimally select the level of fishing effort to be applied considering total mortalities as given. The introduction of a balance constrain which guarantees that total mortality is equal to the sum of individual fishing mortalities optimally selected, enables total fishing mortality to be determined as a combination of contemporaneous abundance and stochastic processes affecting the fishery. In this way, future abundance can be projected as a dynamic system that depends on contemporaneous abundance. The model is generic and can be applied to several issues of fisheries management. In particular, we illustrate how to apply the methodology to assess the floating band target management regime inspired in the new multi-annual plans. Our results support this management regime for the Mediterranean demersal fishery in Northern Spain.


4. Da Rocha, J.M., Prellezo, R., Sempere, J. and Taboada-Antelo, L., " A dynamic economic equilibrium model for the economic assessment of the fishery stock-rebuilding policies", forthcoming in Marine Policy.

Resumen:

The paper develops and analyses a dynamic general equilibrium model with heterogeneous agents that can be used for assessment of the economic consequences of fish stock-rebuilding policies within the EU. In the model, entry and exit processes for individual plants (vessels) are endogenous, as well as output, employment and wages. This model is applied to a fishery of the Mediterranean Sea. The results provide both individual and aggregate data that can help managers in understanding the economic consequences of rebuilding strategies. In particular, this study shows that, for the application presented, all aggregate results improve if the stock rebuilding strategy is followed, while individual results depend on the indicator selected.


5. Da Rocha, J.M.,S. Villasante, C. Pazos Guimerans, J. Rodrigues, M. Antelo, S. Rivero Rodrıguez, M. Coll, C. Pita, G. J. Pierce, L. Hastie, J. Garcıa-Cutrın, P. Veiga and R. Sumaila, " Fishers' perceptions about the EU discards policy and its economic impact on small-scale fisheries in Galicia (North West Spain)", in Ecological Economics.

Resumen:

This paper investigates the impact of the European Union landing obligation in the Galician (North West of Spain) multispecies small-scale gillnet fishery. By combining results from semi-structured interviews with small-scale fishers and a bioeconomic model, we found that the percentage of discards for small-scale fisheries is usually low, which is consistent with general empirical observations globally but can be high when quotas are exhausted. Our results also confirm that the landing obligation would generate negative impacts on fishers' activities by investing more time on-board to handle previously discarded fishes, and putting at risk the security of fishers at sea due to full use of allowable storage on-board coupled with often adverse sea conditions in Galician bays. The application of the landing obligation policy to small-scale fisheries would result in short- and long-term losses of fishing days and yields, with high negative impacts on sustainable fisheries such as the Galician multispecies small-scale gillnet fishery. The expected number of fishing days under the landing obligation is estimated to be reduced by 50% during the five years following the implementation of the policy. The future yield (catches) under the landing obligation would be only 50% of catches expected in the absence of the landing obligation, regardless of the total volume of quotas allocated to the fleet.


6. A. Elbittar, A. Gomberg, C. Martinelli and T. Palfrey, " Ignorance and Bias in Collective Decisions", forthcoming in Journal of Economic Behavior and Organization (2017).

Resumen:

We study theoretically and experimentally a committee with common interests. Committee members do not know which of two alternatives is the best, but each member can acquire privately a costly signal before casting a vote under either majority or unanimity rule. In the experiment, as predicted by Bayesian equilibrium, voters are more likely to acquire information under majority rule, and attempt to counter the bias in favor of one alternative under unanimity rule. As opposed to Bayesian equilibrium predictions, however, many committee members vote when uninformed. Moreover, uninformed voting is strongly associated with a lower propensity to acquire information. We show that an equilibrium model of subjective prior beliefs can account for both these phenomena, and provides a good overall fit to the observed patterns of behavior both in terms of rational ignorance and biases.


7. García, D., Prellezo, R., Sampedro, Da Rocha, J., Castro, J., Cerviño, S., Garcı ́a-Cutrín, J., and Gutierrez, M., " Bioeconomic multistock reference points as a tool for overcoming the drawbacks of the landing obligation", in ICES Journal of Marine Science (2017).

Resumen:

The landing obligation policy was one of the major innovations introduced in the last Common Fisheries Policy reform in Europe. It is foreseen that the policy will affect the use of fishing opportunities and hence the economic performance of the fleets. The problem with fishing opportunities could be solved if single-stock total allowable catches (TACs) could be achieved simultaneously for all the stocks. In this study, we evaluate the economic impact of the landing obligation policy on the Spanish demersal fleet operating in the Iberian Sea region. To generate TAC advice, we used two sets of maximum sustainable yield (MSY) reference points, the single-stock MSY reference points defined by ICES and a set of multistock reference points calculated simultaneously using a bioeconomic optimization model. We found that the impact of the landing obligation is time and fleet dependent and highly influenced by assumptions about fleet dynamics. At fishery level, multistock reference points mitigate the decrease in the net present value generated by the implementation of the landing obligation. However at fleet level, the effect depends on the fleet itself and the period. To ensure the optimum use of fishing opportunities, the landing obligation should be accompanied by a management system that guarantees consistency between single-stock TACs. In this regard, multistock reference points represent an improvement over those currently in use. However, further investigation is necessary to enhance performance both at fleet level and in the long term.


8. Da Rocha, J.,J. Sempere, " ITQs, Firm Dynamics and Wealth Distribution: Does full tradability increase inequality?", forthcoming in Environmental and Resource Economics.

Resumen:

Concerns over the re-distributive effects of individual transferable quotas (ITQ’s) have led to restrictions on their tradability. We consider a general equilibrium model with firm dynamics to evaluate the redistributive impact of changing the tradability of ITQs. A change in tradability would happen, for example, if permits are allowed to be traded as a separate asset from ownership of an active firm. If the property right is associated with ownership of an active firm, the permit can be leased in each period but it is not possible to exit the industry and keep the right. However, allowing the permits to be traded as a separate asset has two effects. First, it leads to a greater concentration of production in the industry. Second, it directly converts a non-tradable asset into a tradable one, and this is equivalent to giving a lump sum transfer to all firms. The first effect implies a concentration in revenues, while the second implies a redistribution of wealth. We calibrate our model to match the observed increase in revenue inequality in the Northeast Multispecies (Groundfish) U.S. Fishery. We show that although observed revenue inequality—measured by the Gini coefficient—increases by 12 %, wealth inequality is reduced by 40 %.


9. Alonso, J., Colla, E., Da-Rocha, J., " The Productivity Cost of Sovereign Default: Evidence from the European Debt Crisis", forthcoming in Economic Theory.

Resumen:

We calibrate the cost of sovereign defaults using a continuous time model, where government default decisions may trigger a change in the regime of a stochastic TFP process. We calibrate the model to a sample of European countries from 2009 to 2012. By comparing the estimated drift in default relative to that in no-default, we find that TFP falls in the range of 3.70–5.88 %. The model is consistent with observed falls in GDP growth rates and subsequent recoveries and illustrates why fiscal multipliers are small during sovereign debt crises.


10. Seira, E., Ponce, A., Zamarripa, G., " Borrowing on the Wrong Credit Card? Evidence from Mexico", in American Economic Review, 107, April 2017.

Resumen:

We establish new facts about the way consumers allocate debt among their credit cards using data for a representative sample of cardholders in Mexico. We find that relative prices are weak predictors of the allocation of debt, purchases, and payments. Consumers allocate a large fraction of their debt to high-interest cards, incurring a cost of 31% above the minimum. Using an experiment, we find that consumers do not substitute in the price margin, although they respond to salient temporary low-interest offers. We conclude that limited attention and mental accounting best rationalize our results and discuss implications for the market.