Synthetic controls with staggered adoption Ben‐Michael, Eli; Feller, Avi; Rothstein, Jesse
Journal of the Royal Statistical Society. Series B, Statistical methodology,
April 2022, 2022-04-01, 20220401, Volume:
84, Issue:
2
Journal Article
Peer reviewed
Staggered adoption of policies by different units at different times creates promising opportunities for observational causal inference. Estimation remains challenging, however, and common regression ...methods can give misleading results. A promising alternative is the synthetic control method (SCM), which finds a weighted average of control units that closely balances the treated unit’s pre‐treatment outcomes. In this paper, we generalize SCM, originally designed to study a single treated unit, to the staggered adoption setting. We first bound the error for the average effect and show that it depends on both the imbalance for each treated unit separately and the imbalance for the average of the treated units. We then propose ‘partially pooled’ SCM weights to minimize a weighted combination of these measures; approaches that focus only on balancing one of the two components can lead to bias. We extend this approach to incorporate unit‐level intercept shifts and auxiliary covariates. We assess the performance of the proposed method via extensive simulations and apply our results to the question of whether teacher collective bargaining leads to higher school spending, finding minimal impacts. We implement the proposed method in the augsynth R package.
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BFBNIB, FZAB, GIS, IJS, IZUM, KILJ, NLZOH, NUK, OILJ, PILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
A number of authors have argued that the conventional model of unemployment dynamics due to Mortensen and Pissarides has difficulty accounting for the relatively volatile behavior of labor market ...activity over the business cycle. We address this issue by modifying the Mortensen‐Pissarides framework to allow for staggered multiperiod wage contracting. What emerges is a tractable relation for wage dynamics that is a natural generalization of the period‐by‐period Nash bargaining outcome in the conventional formulation. We then show that a reasonable calibration of the model can account for the cyclical behavior of wages and labor market activity observed in the data.
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BFBNIB, CEKLJ, INZLJ, IZUM, KILJ, NMLJ, NUK, PILJ, PNG, SAZU, UL, UM, UPUK, ZRSKP
This paper investigates computationally when and how the order of move matters in a Conversational War of Attrition (Meyer-ter-Vehn et al., 2018). Switching the first mover flips the debate’s outcome ...for certain type-realizations and triggers two potentially opposing forces on jurors’ ex-ante expected costs. In the finite-horizon version of the game, a last-proposal advantage prevails if the jurors’ bias dominates their impatience, and a first-proposal advantage prevails if impatience dominates bias. In the infinite-horizon version, there is an unambiguous first-proposal advantage. These mechanisms are reminiscent of the Rubinstein (1982) sequential bargaining game.
•Switching the first mover may flip the outcome of a Conversational War of Attrition.•Impatience causes ex-ante a first-proposal advantage.•In a finite debate, an additional force favors the last proposal.•In a finite debate, the first-proposal advantage prevails if impatience dominates bias.•The mechanisms are similar to the Rubinstein sequential bargaining game.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
We study a model of sequential bargaining in which, in each period before an agreement is reached, the proposerʼs identity is randomly determined, the proposer suggests a division of a pie of size ...one, each other agent either approves or rejects the proposal, and the proposal is implemented if the set of approving agents is a winning coalition for the proposer. The theory of the fixed point index is used to show that stationary equilibrium expected payoffs of this coalitional bargaining game are unique. This generalizes Eraslan 34 insofar as: (a) there are no restrictions on the structure of sets of winning coalitions; (b) different proposers may have different sets of winning coalitions; (c) there may be a positive probability that no proposer is selected.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
Negotiations trigger anxiety. Across four studies, we demonstrate that anxiety is harmful to negotiator performance. In our experiments, we induced either anxiety or neutral feelings and studied ...behavior in negotiation and continuous shrinking-pie tasks. Compared to negotiators experiencing neutral feelings, negotiators who feel anxious expect lower outcomes, make lower first offers, respond more quickly to offers, exit bargaining situations earlier, and ultimately obtain worse outcomes. The relationship between anxiety and negotiator behavior is moderated by negotiator self-efficacy; high self-efficacy mitigates the harmful effects of anxiety.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
After the increase in inequalities following the Great Recession, studies on wage bargaining systems have increasingly focused on wage inequality. This research examines wage inequality associated ...with collective bargaining levels in Spain, based on matched employer–employee microdata and quantile regression methods. These methods are applied across the wage distribution, following the method proposed by Firpo et al. (2011), to estimate wage premiums associated with agreement levels and to decompose the wage differentials observed at different points of the wage distribution. From the evidence obtained it can be concluded that, although the higher wages found in firm-level agreements are explained by the better observed characteristics of firms and workers covered by these collective agreements, there remains a positive wage premium. Although this premium is seen throughout the wage distribution, it favours mostly workers in the middle and upper-middle end. This slightly increases wage inequality in comparison with sectoral agreements. In contrast, workers without collective bargaining coverage generally suffer a wage penalty. This penalty is only observed on the left of the wage distribution. It becomes a significant wage premium in the upper end of the distribution, which implies a significant increase in wage inequality. In short, the evidence of this research suggests that reducing the coverage of collective bargaining could be associated with a significant increase in wage inequality. A better policy option for countries with a predominant sectoral model, such as Spain, would be to move towards an organized decentralization model. This would cause significant gains in employment as suggested by OECD (2019) and only a slight increase in wage inequality.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
The small open economies in Scandinavia have for long periods had high work effort, small wage differentials, high productivity, and a generous welfare state. To understand how this might be an ...economic and political equilibrium we combine models of collective wage bargaining, creative job destruction, and welfare spending. The two-tier system of wage bargaining provides microeconomic efficiency and wage compression. Combined with a vintage approach to the process of creative destruction we show how wage compression fuels investments, enhances average productivity and increases the mean wage by allocating more of the work force to the most modern activities. Finally, we show how the political support of welfare spending is fueled by both a higher mean wage and a lower wage dispersion.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
Limited Foresight Equilibrium Rampal, Jeevant
Games and economic behavior,
March 2022, 2022-03-00, Volume:
132
Journal Article
Peer reviewed
This paper models a scenario where finite perfect-information games are distorted in two ways. First, each player can have different possible levels of foresight, where foresight is a particular ...number of future stages that the player can observe/understand from each of her moves. In particular, each player's foresight is allowed to be “limited” or insufficient to observe the entire game from each move. Second, there is uncertainty about each opponent's foresight. I define the Limited Foresight Equilibrium (LFE) for this model. An LFE specifies how limited-foresight players' strategies and beliefs about opponents' foresight evolve as they move through the stages of the game. I show the existence of LFE and describe its other properties. I show that in LFE limited-foresight players follow simple heuristics for beliefs and actions. As applications, LFE is shown to rationalize experimental findings on Sequential Bargaining and the Centipede game.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Against the European trend, German statutory collective bargaining extensions (SBEs) have decreased in the last two decades, contributing to the exceptional erosion of German wage-bargaining ...coverage. This article distinguishes between two liberalization dynamics: an intrasectoral dynamic that started with the introduction of employers’ association memberships outside the scope of collective agreements, and an intersectoral dynamic. The latter is the result of an abnormal German institutional feature, the veto power of the employers’ umbrella association in the committees that have to approve SBE applications. Activation of this veto enabled employers to promote collective bargaining erosion in sectors other than their own, in order to contain cost pressures. This intersectoral liberalization dynamic has been part of Germany’s transition into an asymmetrically export-driven growth regime and could be stopped by means of political reforms.
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NUK, OILJ, SAZU, UKNU, UL, UM, UPUK
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